TurskeyM_M4_A1 - Financial statements of publically traded...

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Financial statements of publically traded companies in the United States are required to adhere to the rules of GAAP (generally accepted accounting principles). GAAP is “the common set of accounting principles, standards and procedures that companies use to compile their financial statements” (Investopedia, 2009, para. 1). Policy boards set the standards by which companies both record and report financial information. In 1972 the FASB (Financial Accounting Standards Board) was created with the purpose of establishing accounting standards used by companies within the United States. Today more companies have subsidies in foreign countries. Different countries have their own set of accounting standards. “Financial accounting is influenced by the environment in which it operates. Nations have different histories, values, cultures, and political and economic systems, and they are also in various stages of economic development”(Schroeder, Clark, & Cathey, 2005, p. 1). As the world moves toward a globalized economy critic have called for a set of universal accounting standards. In 1973 the IASC (International Accounting Standards Committee) was formed in an effort to establish accounting standards that can be used worldwide. In 2002 responsibility for international standards was transferred to the IASB (International Accounting Standards Board). The following paper will include a history of the relationship between the FASB and IASB, FASB pronouncements and the IASB equivalents as well as how the MSA program prepares individuals for the accounting profession. Relationship between the FASB and IASB In an effort to converge U.S. GAAP and IFRS the FASB has undertaken the Short-term International Convergence Project. “The projects scope is limited to those differences in which convergence around a high quality solution would appear to be achievable in the short term, usually by selecting between
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This note was uploaded on 03/25/2010 for the course BUS 210 taught by Professor Scottrought during the Spring '08 term at University of Phoenix.

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TurskeyM_M4_A1 - Financial statements of publically traded...

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