March 14, 2011
Delphine L. Agnor Wolsker
The Relationship Between FASB and IASB
The International Accounting Standards Board (IASB) was created after the Financial Accounting Standards Board (FASB) to establish a single set of accounting procedures and standards for both boards. The process has not always been an easy one, but the goal of merging the accounting standards globally overrides the disagreements. Overcoming impediments, such as language, culture, economic and political environments has made the process problematical. The IASB and FASB continue to labor on the short term goals agreed upon at the Norwalk Summit, held in Norwalk, Connecticut, on September 18, 2002 [ (Business Wire, 2002) ].
In 1973, FASB was born of the Financial Accounting Foundation (FAF) to generate and rectify practices of financial accounting and reporting for nongovernmental businesses. This change was made because of the censure of the Accounting Principles Board (APB) The APB fashioned two committees, the Wheat committee, charged with examining the way financial accounting principles would be created, and the Trueblood committee, to verify the objective of the financial statements. The American Institute of Certified Public Accountants (AICPA), which took the place of the APB, put into operation the Wheat Committee recommendations and deems the FASB the official body to have authorization to originate standards for financial accounting [ (Schroeder, 2011) ].
With the growing number of multinational corporations, principles were required to surmount the obstacles and price related with generating numerous financial reports. In 1973, the International Accounting Standards Committee (IASC) was the first international group created to establish accounting standards. The IASC was restructured in 2001, and at that time became autonomous, renaming itself the International
Cited: Business Wire. (2002, October 29). FASB and IASB Agree to Work Together toward Convergence of Global Accounting Standards. Retrieved March 12, 2011, from AllBusiness: http://www.allbusiness.com/company-activities-management/company-strategy/6001983-1.html Financial Accounting Standards Board. (n.d). Facts about FASB. Retrieved March 12, 2011, from Financial Accounting Standards Board: http://www.fasb.org/facts/index.shtml Gornik-Tomaszewski, S. &. (2003, Spring). Cooperation between FASB and IASB to achieve convergence of accounting standards. Retrieved March 12, 2011, from Entrepreneur: http://www.entrepreneur.com/tradejournals/article/102270935_2.html International Accounting Standards Board. (n.d.). History. Retrieved March 12, 2011, from IASB: http://archive.iasb.org.uk/about/history.asp Schroeder, R. G. (2011). Financial accounting theory and analysis: Text readings and cases. Retrieved March 10, 2011, from University of Phoenix: https://ecampus.phoenix.edu/content/eBookLibrary2/content/DownloadList.aspx?assetMetaId=ce9325f9-d0aa-4005-bcff-61f723a936f1&assetDataId=bc5bfcda-2109-424b-808e-11cc5028d554 University of Phoenix. (2010, September 10). Master of Science in Accountancy . Retrieved March 12, 2011, from University of Phoenix: http://www.phoenix.edu/programs/degree-programs/business-and-management/masters/msa/v001.html