GAAP should replace IFRS
International Accounting ACCT*4270*K1May 9, 2012
International Financial Reporting Standards (IFRS) replaced International Accounting Standards (IAS) in 2001. The Norwalk Agreement was formed in September 2002, at a meeting in Norwalk, Connecticut. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) “pledged to use their best efforts to (1) make their existing financial reporting standards fully compatible as soon as is practicable and (2) to coordinate their work program to ensure that once achieved, compatibility is maintained.” (Doupnik & Perera, 2011) Ten years have passed and still no outcome or solution has been reached. The Norwalk Agreement has proved to not only be a waste of time and resources but also failed to achieve their ultimate goal, the global compatibility of financial statements. Professionals and academics would agree that comparability of financial statements globally would be useful and time saving in all aspects of work, investments and school. The goal of global compatibility of financial statements would be convenient but there are far too many differences to account for. Differences exist between cultures and countries thus making one set of financial statement standards highly unlikely if not impossible. IFRS is a principles based approach to accounting as General Accepted Accounting Principles (GAAP) is more rules based. In light of all the corporate scandals (WorldCom, Tyco, Enron) opposition comes as no surprise for the elimination of GAAP and the adoption of a more transparent way to issue financial statements. The problem of the aforementioned companies was not because of GAAP deficiencies, the problem lied in the corporate executives running the companies and the SEC regulators assigned to oversee them. Also, blame can also be placed on the auditors not issuing un-bias attestations and opinions....
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