The International Accounting Standards Board (Iasb) and the Financial Accounting Standards Board (Fasb) the Convergence Project

The need for accounting has been around for years, financial accounting exists all over the world is influenced by the environment in which it operates and financial statement are prepared toward their primary users (Schroeder, Clark, Cathey 2011). The multinational corporation is growing and the need for international accounting practices are needed, as the global economy grows the financial statements are still influenced by the environment of which it operates as well as being prepared for the primary users, this makes it difficult for end users in multi countries make critical decisions based on financial reports they do not fully understand. The issues with Multinational Corporation and accounting principles are being addressed by the IASB and the FASB; the two boards have realized that there is a need for international accounting principles in this growing global economy.

Relationship between the IASB and the FASB

In the 1990’s the global economy was booming and multinational corporations were finding it difficult to make decisions based on the financial statement from foreign entities and they needed a set of standards that all sides could relate too, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have engaged in several efforts to attain a uniform set of International Accounting standards, the efforts include; The FASBs Short-term International Convergence Project, the Norwalk Agreement, and the Roadmap to Convergence (Schroeder, Clark, Cathey 2011).

The FASB’s Short-term International Convergence Project’s main goal was to remove individual differences between the Generally Accepted Accounting Standards ( GAAP) that is used in the United States and the International Financial Reporting Standards used in foreign countries. The FASB’s intentions were to remove these individual differences that are not with the scope of other major projects such as the Norwalk Agreement (Schroeder, Clark, & Cathey...