The ongoing convergence of US GAAP with International Financial Reporting Standards (IFRS) will have a profound effect on the accounting profession. The upcoming changes will require more probing and extensive inquiries to reduce ambiguity and uncertainty in financial statement audits where the number of "bright-line" rules has been reduced. Highly valued accounting character traits that have worked well in a regulated environment -- such as attention to detail and adherence to clear rules -- may need to be reevaluated as changes are made from the rules-based GAAP to the principles-based IFRS. According to the FASB, the main differences between rules-based accounting standards and principles-based standards are that principles are broad and there is less guidance on implementation. Such...
The objective of this study is to examine country-specific factors that are related to the Securities and Exchange Commission's (SEC) issuance of foreign-related Accounting and Auditing Enforcement Releases (AAER). Foreign-related AAERs include sanctions issued against foreign firms registered in the US and against domestic firms with foreign operations. The SEC's objectives of prevention and deterrence are compromised to the extent that intentional misstatements are overlooked for any portion of the registrant population. This study makes two contributions to the existing literature. First, although prior research evaluates AAER composition, no study has tested whether macro-level risk factors can explain the SEC's issuance of AAERs. Second, while numerous papers have discussed the reg...
...The International Accounting Standards Board (IASB) uses this model as the template for d...GAAP to the International Accounting Standards. This pr...
This paper investigates differences between the financial statements of Volvo Corporation, Daimler AG, and Fiat SPA as prepared under International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (U.S.GAAP) from 2004-2006. The application of IFRS generally resulted in higher net income than U.S. GAAP. Many differences have already been resolved by the convergence projects of the Financial Accounting Standards Board and the International Accounting Standards Board. However, significant and persistent reconciling items that are likely to affect U.S. automakers' financial statements include: pension and other post-retirement benefits expenses, capitalization of development costs, and minority interests reporting.
Accounting students and faculty members interested in research now have an incredible resource. The Financial Accounting Standards Board's GAAP codification is a readily available, single official source of authoritative US GAAP. Faculty who assign papers on technical topics in intermediate and advanced accounting or auditing courses will find that students will be able to access the search features of the codification with ease. The codification is standardized in a hierarchical structure of topic, subtopic, section, and paragraphs. Each complete reference includes its categories and subcategories. For practitioners and faculty familiar with precodification FASB Statements, a cross reference tool allows for easy access to the relevant text.
As of this writing, non-US companies using International Financial Reporting Standards (IFRS) are permitted to list their securities on US stock exchanges without reconciling those statements to US GAAP. In February 2010, the SEC stated that US issuers would not be required to employ IFRS until 2015 at the earliest. The SEC further stated that it would vote in 2011 whether to go forward with a mandate to employ IFRS solely or to allow firms to use either IFRS or US GAAP. A survey was sent to a random sample of 2,000 AICPA members employed by public accounting firms that have substantial publicly traded companies as clients. When asked about the comfort level with their own current IFRS knowledge, respondents generally did not think that they had the current competence level to effective...
Few accounting issues have generated as much controversy as the use of fair value measurements, which are in some cases required and in other cases permitted under US Generally Accepted Accounting Principles (GAAP). The Financial Accounting Standards Board (FASB) has identified and acted on several opportunities to improve the disclosure provisions of US GAAP that relate to fair value measurements. This article presents the recent changes to those provisions and look ahead to an additional change that the FASB is considering. After further deliberations and a few significant modifications to what it had proposed in the Exposure Draft, the FASB issued final ASU No. 2010-06, "Improving Disclosures about Fair Value Measurements," on Jan 21, 2010. In ASU No. 2010-06, the FASB states that it...
From fair value accounting, to the convergence of U.S. GAAP and international financial-reporting standards to critical accounting policies, judgments and estimates, an ongoing challenge for audit committees is to understand important financial-reporting issues and developments affecting the company. The tremendous focus on risk today is an opportunity for the board to reassess the role of the audit committee (and the full board and other standing committees) in overseeing risk, based on the unique needs of the company and industry. 6.
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