Iasm

1. Describe briefly what is the role of the International Accounting Standards Board?

The International Accounting Standards Board (IASB) is based in London, England. It is an independent and privately funded group that sets accounting standards. It was founded on April 1, 2001. The IASB is responsible for developing international financial reporting standards and promoting its use globally (Investopedia, 2011).

2. Describe briefly what is the role of the U.S. Financial Accounting Standards Board?

The US Financial Accounting Standards Board (FASB) is a seven member independent board made of accounting professionals who develop standards of financial accounting and reporting in the United States. These standards known as generally accepted accounting principles (GAAP) help shape corporate financial reports and are recognized by the Securities and Exchange Commission (Investopedia, 2011.)

3. What are the benefits of having one world-wide standard for financial reporting?

One benefit is that smaller and developing nations could use that standard to establish their own accounting standards. Also, because business is becoming more and more global, it would make it easier to have common standards in all financial reporting of any company worldwide.

4. The Securities and Exchange Commission has currently accepted International Financial Reporting Standards for foreign companies but not US. listed companies. As a manager of a large public company, what concerns would you have if IFRS replaces U.S. GAAP?

One concern I would have is that it would be very costly to convert from US GAAP to IFRS. These costs include workforce training, user training, and system changes. Also, the accounting curriculum for colleges and universities would need to be updated to accommodate these changes.

Another concern I would have is how comparable the financial statements would be between companies in different countries. The differences in backgrounds of...