Unformatted text preview: round the w orld.
Still, ev en if m any of the selling points of I FR S are ov erstated, the risks to the U .S. of adopting those
rules are exaggerated, too. For instance, opponents of adopting I FR S often claim that those standards
are inferior to G AAP. They point out that I FR S offer m ore discretion and less guidance than G AAP.
Again, these argum ents m iss the crucial point that factors bey ond the accounting standards play a
significant role in determ ining com panies’ reporting practices. That is, ev en if I FR S w ere inferior to
G AAP, the standards w ould be applied w ithin the U .S. institutional infrastructure, w hich features
strong capital m arkets, SEC enforcem ent and priv ate securities litigation. This env ironm ent prov ides
m any incentiv es for transparent and truthful reporting, and these safeguards w ould rem ain in place
after the adoption of I FR S. As a result, it is unlikely that U .S. reporting quality w ould deteriorate
significantly . Sim ilarly , the frequently v oiced concern that the I ASB could set new I FR S th...
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This document was uploaded on 03/06/2014 for the course MGMT 4369 at Texas Pan American.
- Spring '14