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Today’s global business landscape is one of constant change. The accounting industry like all others, is experiencing the effects of globalization and as the U.S. accounting industry continues to press forward with replacement of rules-based accounting standards under the U.S. Generally Accepted Principles, with principles-based accounting standards under International Financial Reporting Standards, adoption of IFRS is inevitable.
Leading the push for a single set of high-quality International accounting standards is the U.S. Securities and Exchange Commission (SEC), a government appointed body. The SEC’s call to action has prompted the shift away from U.S. GAAP toward the globalization of accounting standards through a slow and steady convergence
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The FASB, GASB & IASB take vigorous and thorough approaches to the standard setting process and there are many similarities each standard setters “due process” which involves a series of extensive information-gathering steps before an accounting standards update is issued such as public board meetings, deliberations, issuance of exposure drafts and requests for comment from interested parties.
An unfortunate outcome of the level of transparency displayed by the FASB & IASB in the standard setting process is the political attention and pressure incurred from groups that desire accounting standards tailored to their advantage. The FASB in particular has experienced a tremendous amount of pressure over the years from companies regarding controversial accounting standards and has implemented changes to standards in response to such
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Adoption of a global set of accounting standards will bring about superior comparability and consistency of financial statements around the world, facilitate more cross border investment and improve financial reporting in the U.S. By contrast, adoption of a global set of standards will place a heavy financial burden on U.S. companies to make the switch from U.S. GAAP to IFRS. Companies with international operations may consider the move a worthy investment but “it has been estimated that it would cost most companies 0.5 to 1.0% of annual revenues to make the switch to IFRS. This equates to $40 to $60 billion for S&P 500 companies” (Lin, J., & Fink, P., 2013 & Reilly,

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