Open AccessWill We Ever Close the GAAP?: A Look into the International Convergence of Accounting Standards
Author(s) -
Melanie Rosin
Publication year - 2016
Publication title -
michigan business and entrepreneurial law review
Language(s) - English
Resource type - Journals
eISSN - 2375-7558
pISSN - 2375-7523
DOI - 10.36639/mbelr.6.1.will
Subject(s) - accounting , accounting standard , harmonization , international financial reporting standards , business , financial accounting , convergence (economics) , fund accounting , mark to market accounting , generally accepted auditing standards , commission , capital market , quality (philosophy) , accounting information system , finance , economics , physics , acoustics , economic growth , philosophy , epistemology
This Note examines the trend toward the international convergence of accounting standards and then identifies the factors contributing to the process of this trend as well as the obstacles standard setters face in moving to one high quality, unified set of standards. The Note next identifies the possible outcomes for the future of convergence, including the mandatory adoption of International Financial Reporting Standards (IFRS) by the United States, the Securities & Exchange Commission’s (SEC) encouragement of the voluntary of adoption of IFRS by the United States, requiring public companies to comply with both U.S. Generally Accepted Accounting Principles (U.S. GAAP) and IFRS, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board’s (the IASB) joint creation of a new set of combined standards, and the harmonization of existing standards. The Note then endorses the mandatory adoption of IFRS in the United States as the most efficient approach for the worldwide capital market as a whole but concludes that the most likely outcome will be a slow process of harmonization.