U.S. GAAP vs. International Accounting Standards

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GAAP verses IAS

Forces of gloabalization are forcing many companies and countries to conform to international best standards of performing various business activities . The accounting world is not immune to the globalization . The profession is currently faced with pressure to embark on developing international standards that would be applied in all countries . Owing to the rising important of this matter , concurrent sections of this report shall elaborate on several aspects of establishing and adopting international standards . The first section shall define different

br standards applied by global accounting profession . The second section list similarities and differences between United States GAAP and the global IAS , both would be defined therein . The third section trace the convergence between the two dominant procedures , whereas the fourth section would explain difficulties in adopting IAS in all countries . A concluding section shall highlight assertions made herein

Section I . GAAP and IAS Defined

The Generally Accepted Accounting Standards , GAAP , is the benchmark standard used in the United States and few other countries . Companies and other organizations in the country are mandated to report using the system , failure of which they become Subject to regulatory investigations at state and federal levels . Having single standard in the fifty states has helped stakeholders in America 's organizations to easily understand financial among other aspects reposted . GAAP provides procedures that organizations have to follow when reporting their reports . In to ensure accuracy and transparency , the reports prepared through GAAP are passed through independent auditors before being to stakeholders that include shareholders and regulatory authorities

The Financial Accounting Standard Board , FASB , is the authority in ensuring that reporting is done in accordance to the set guidelines FASB is made up of representatives from accounting profession in the country as well as governance authorities . Heavy representation from accounting community helps in providing advisory to companies and other organizations , which makes it more successful in fulfilling mandate . The role of undertaking disciplinary actions is left to other state regulatory bodies such as the Securities and Exchange Commission , SEC This leaves FASB with the role of developing GAAP rules and ensuring that organizations are able to comply to the rules

The International Accounting Standards , IAS , include the reporting procedures increasingly being adopted by many countries in the world Countries (US included ) that have their own procedures are being encouraged to follow the process . The European Union , Australia , and South Africa are the main proponents of the system (PriceWaterhouseCoopers 13 ) and are therefore at the forefront of encouraging the others to follow suit . As mentioned in the introduction integration of global economies is forcing many companies and countries to embark on employing international best practices that are used in other countries . With regard to companies , employing IAS instead of local procedures helps in attracting international investors among other stakeholder groups . This is influenced by the ability of many people in the country to understand what is contained in the companies ' financial reports

International Accounting Standards Board , IASB , serves the role...