As the convergence of IFRS and GAAP continues to impose new personal and professional challenges on U.S. auditors, it also presents new career opportunities for those who embrace the continuous, accelerating change that characterizes globalization. U.S. auditors who recognize the opportunities and prepare to take advantage of them have little to fear from the convergence. In contrast, auditors who are in denial about the convergence’s inevitable effects face a very different future. 1. Create an argument for or against the IFRS and GAAP convergence process versus a pure adoption of IFRS in the context of impact to the public accounting profession. Approximately 120 nations and reporting jurisdictions permit or require IFRS for domestic listed companies, although approximately 90 countries have fully conformed with IFRS as promulgated by the IASB and include a statement acknowledging such conformity in audit reports. Given all of these factors, measuring the overall impact of convergence with IFRS in the U.S. comes down to a trade-off between the one-time costs of transitioning to a new system, and the relatively modest but recurring benefits of being able to compare reports across borders as well as the recurring cost savings of using a single reporting standard for some firms. Convergence is driven by several factors, including the belief that having a single set of accounting requirements would increase the comparability of different entities' accounting numbers, which will contribute to the flow of international investment and benefit a variety of stakeholders. Criticisms of convergence include its cost and pace, and the idea that the link between convergence and comparability may not be strong. By rejecting IFRS, the U.S. would deal a major blow to the prospect of unified global accounting standards -- a goal that is widely endorsed, including by many American companies and investors. The U.S. would almost certainly lose its current major influence on the setting of international rules including its role in the oversight of the IASB. That would be a loss: The U.S. has been a positive influence bringing authority and expertise in accounting matters. That influence would also benefit global capital markets and investors by countering the growing clout of countries that may pursue less capital-market oriented goals with financial reporting. Perhaps even more importantly, a perceived unwillingness by the U.S. to cooperate in accounting matters could spill over into other areas of global financial regulation where reforms and international coordination are much needed. This could happen not only because accounting numbers are a mainstay for other financial regulation, but also because the world’s reporting convergence project is one of the longest and most advanced attempts to build a global regime. If it were to fail, it would undermine other efforts to create global standards, for example, in banking or capital-market regulation and makes United State isolated from all other countries around the world. Whether to adopt IFRS or to converge with IFRS was in hot debate. Adoption would mean that the SEC sets a specific timetable when publicly listed companies would be required to use IFRS as issued by the IASB. Convergence means that the U.S. Financial Accounting Standards Board (FASB) and the IASB would continue working together to develop high quality, compatible accounting standards over time. More convergence will make adoption easier and less costly and may even make adoption of IFRS unnecessary. Supporters of adoption, however, believe that convergence alone will never eliminate all of the differences between the two sets of standards. In 2011, SEC staff introduced a possible method of incorporating IFRS into the U.S. financial reporting system that would represent an endorsement and convergence approach for aligning U.S. GAAP with IFRS over a period of time. Ultimately, the expectation is...
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