conceptual framework

Topics: International Financial Reporting Standards, Financial statements, International Accounting Standards Board Pages: 11 (3495 words) Published: March 8, 2014


School of Management
Semester 1, Academic Session 2013/14
ACW 367: Accounting Theory & Issues

THE CONVERGENCE TO A GLOBAL ACCOUNTING STANDARD

LECTURER: PROFESSOR DR. FAUZIAH MD. TAIB
GROUP MEMBERS:
BIL
NAME
MATRIC NO.
1
MUHAMAD FAZLULLAH B MUHAMAD NAZRI
108548
2
SITI NUR AMIRAH BT SAIKH MD NOR
108569

[ACKNOWLEDGEMENT]

Through this opportunity, we would like to thank Professor Dr. Fauziah Md. Taib, our ACW367’s lecturer because she gave us a lot of valuable information and guidance throughout this assignment. We gratefully devote our thanks her since she is always give us aspirations in order to complete this challenging assignment. We cannot repay her kindness unless we do the best in this assignment. Besides that, we would like to appreciate people that guide us to complete our tasks especially our course mates who have helped us and taught us in regarding how to do this assignment. Without their contributions and sharing ideas, we will not able to complete our assignment on time.

Moreover, we have to admit that we learnt a lot from this assignment especially regarding the accounting issues such as the problems that has been faced by standard setters until their achieve a great success today. We are able to appreciate what we practically learn from more than 3 years in this excellence university. Finally, this assignment is very useful for us because it increases our understanding and able to exposes us to the current issues relating theories of accounting standards.

Table of Contents

INTRODUCTION

On 29 April, 2012 Sleigh-Johnson, head of ICAEW's Financial Reporting Faculty said that “A US decision is really a critical part of the future success of IFRS. This is an once-in-a-lifetime change in global regulation and you just have to recognise there will be obstacles and delays”. Sleigh’s statement above mentions the important of role possess by US toward convergence to global accounting standard. On year 2002, a great achievement happens between IASB and FASB when they signed the Norwalk Agreement. That was point of time both standard setters start converge beyond pure compliance and enhance business reporting more broadly. Even though a lot of difficulties happen, they believe that the convergence should start today, with building awareness and communication. Momentum will start to increase, so both standard setters need positioning themselves to fit the potentially big changes further down the line. This assignment describes the convergence between IFRS and US GAAP then shows the effect of the process. In order to complete this assignment, the factors that influenced the changes are exposed.

FINDING & ANALYSIS

1. BACKGROUND OF CONVERGENCE BETWEEN IFRS AND US GAAP

Theory suggests that the value of accounting information is strongly dependent on its use by different parties, their utilities and their information endowment. According to chronological history of accounting standards, over at least 100 years of accounting theory and practice, there have been no constant accounting standards, regardless of a wealth of accounting theories that have been advanced. The reasons for those inconsistencies in accounting standards actually stem from their development process. For example, standards are developed over a long period of time, by different standard setters, different economic situations and different priorities; and they are a result of political compromises and pressures (Alfred Wagenhofer, 2009). So, using the same standards for public and private entities may not be optimal. However, the International Accounting Standards Board (IASB) does not concern about those theory and problems, instead its confidence and trust make it always try to develop a set of excellence quality, comprehensible, and enforceable information of International Financial Reporting Standards (IFRS) to serve all the users including investors, lenders and others in...

References: 1. Jay Godfrey (2010), Accounting Theory, 7th Edition, viewed on 10/11/2013
2
9. Paul Pacter, CPA, PH.D., (February, 2013), What have IASB and FASB convergence efforts achieved?, viewed on 26/11/2013, Available from:
http://www.journalofaccountancy.com/Issues/2013/Feb/20126984.html
12. Nation News, (May 27, 2013), Long push for new accounting standards, viewed on 26/11/2013, Available at:
http://www.thestar.com.my/News/Nation/2012/04/29/Long-push-for-new-accounting-standards.aspx
13. Chodor Larry, Erickson Craig, (February 08, 2013), Latest News on Convergence Between IFRS and US GAAP, viewed on 27/11/2013, Available from:
http://www.wiss.com/articles/content.php?id=1302_convergence
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • influences that impacted the development of the conceptual framework Essay
  • Conceptual or Theoretical Bases for Research Studies Essay
  • Scientific Method and Conceptual Framework Essay
  • Conceptual Essay
  • conceptual framework vs Theoretical framework Essay
  • Conceptual Framework and Statement of the Problem Essay
  • A Framework of Information Systems Concepts Essay
  • The Conceptual Blender Essay

Become a StudyMode Member

Sign Up - It's Free