Jennifer M. Gribbins
University of Phoenix
This report was prepared on April 29, 2013, for ACC/541, Accounting Theory and Research taught by Leslie Crews. What is the relationship between the IASB and the FASB?
Sharing the common goal of establishing accounting and financial reporting standards, the FASB focuses on accounting standards in the United States while the IASB focuses on global standards (Carty). With the number of companies operating globally, the IASB and the FASB often work together, with both boards contributing toward global accounting standards (Carty). “The FASB also sets standards and rules for individual certified public accountants practicing in the United States” (Carty). History
For nearly forty years, the International Accounting Standards Board (IASB) and its predecessor the International Accounting Standards Committee IIASC), have been working to develop a set of high quality, understandable, and enforceable International Financial Reporting Standards (IFRS) to serve equity investors, leaders, creditors, and others in globalized capital markets. When the IASB took over from the IASC in 2001, few countries had adopted International Accounting Standards (as IFRS were then called) even for cross-border public sales of securities, let alone for domestic public companies (Pacter, February, p. 1). In 2000, the International Organization of Securities Commissions (IOSCO) endorsed IFRS for cross-border securities offerings in the world’s capital markets (Pacter, February). In 2002, the European Union made the decision to require IFRS for all companies listed on a regulated European stock exchange effective date, 2005 (Pacter, February). Those events created a snowball effect, to the point where today roughly 100 countries require IFRS or a national word-for-word equivalent for all or most listed companies (Pacter, February). A primary goal, from almost the...