Relationship Between IASB and FASB
In 1973, the private sector International Accounting Standards Board (IASB) was formed. The IASB is a natural extension of a global market that has been evolving over the last three decades. The IASB formulates and publishes accounting standards to be observed when presenting financial statements and promote their global acceptance. As an overarching mission, the IASB works to improve and harmonize accounting standards, regulations, and procedures as it relates to financial statements. IASB standards provide a reference model and set of examples for financial reporting in developing countries. The IASB has no authority with the Financial Accounting Standards Board (FASB) or the Securities and Exchange Commission (SEC) in the United States at this time. Even though the FASB and SEC are not members of the ISAB, the SEC has ruled formally that public companies that have adopted the IASB standards can list their securities on the United States stock exchanges (Schroeder, Clark, & Cathey, Chapter 1, 2011). The International Accounting Standards Board is partnering with national standard setters to accelerate the convergence between national and international accounting standards. The goal of convergence is for organizations across the world to report comparable financial accounting information that is transparent and accurate so that users of the information can make sound economic decisions (Schroeder, Clark, & Cathey, Chapter 3, 2011). Currently the IASB is comprised of 15 members that are appointed by the board of trustees. The membership is scheduled to increase to 16 in 2012. The trustees make sure the board is not dominated by any particular regional interest. International Accounting Standards (IAS) published by the IASB are called International Financial Reporting Standards (IFRS) (Schroeder, Clark, & Cathey, Chapter 3, 2011). The Financial Accounting Standards Board (FASB) was borne out of...
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