Importance of Ifrs Essay

681 Words Sep 20th, 2012 3 Pages
IFRS, International Financial Reporting Standards, are a set of accounting guidelines and standards just like the GAAP (American Institute of Certified Public Accountants, 2012). This is the first thing that Marie Claveau needs to understand, since the firms will be expecting people who can help in the adoption of the new international accounting standards. The standards were established by the international accounting standards board to become the globally accepted standards for use in the preparation of financial statements, in public companies. It is supposed to be a set of standards that can be used globally for the public companies, as well as private companies willing to use them as their accounting standards. Currently, it has been …show more content…
The SEC seeks to do this through six areas of focus upon which research are conducted to find out the benefits of using the IFRS (Securities of Exchange Commission, 2011). The first area of focus by the SEC is the assessment of whether the new international accounting standards are sufficient for reporting within the United States domestic market. This will provide the green light of the usability of the international standards. Additionally, this goes ahead to identify the benefits that are available to the companies and firms upon adoption of the IFRS. The adoption of the IFRS will have several benefits to the four large accounting firms. Having the whole globe use the same accounting standards raises a better chance for comparison of firms across the whole globe. One of the advantages or benefits is the ability to compare financial statements or accounting processes across global competitors (American Institute of Certified Public Accountants. 2012). With an identical reporting standard across the whole globe, competitors are able to compare and benchmark easily since financial statements are reported on the same basis. For instance, if they use the same accounting standards to report assets, companies could always make an easy comparison based on the same reporting standards. Additionally, multinational and

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