International Reporting And International Accounting Standards

1163 Words Aug 1st, 2016 5 Pages
International reporting is becoming a serious topic as the Securities Exchange Commission and the Financial Accounting Standards Boards have embarked in a major project of convergence to International Accounting Standards by working with the International Financial Reporting Standards. Multinational corporations, including cross-border investments will be affected by this change. The convergence project has its friends and foes; however, a major change in financial reporting can be compared to a major change in legislation, which will cause a sense of apprehension at first. The convergence project, although in its developmental stage, implies major differences in financial reporting and abidance of each country’s generally accepted accounting principles. Users seek financial statements comparability by considering factors when comparing financial statements from companies in different countries, including cross-country ratio analysis and coping in several ways with accounting principles differences.
Prior to the convergence project of the Securities Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) between the International Accounting Standards Board (IASB), different countries reported financial statements according to each country’s generally accepted accounting principles (GAAP). Each country’s GAAP is based on socio, cultural, economic and political factors that established financial reporting compliance and professionals’ foundation.…

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