As the manager, you feel that, once again, the new hires need to develop an understanding of what is happening in the international corporate accounting climate. Many countries have already made the change to IFRS. The United States is moving in that direction. It will be important for them to have a foundation to build on with regard to their future development of expertise in the area of moving or translating U.S. GAAP to IFRS.
Make a list of 5-10 pros and 5-10 cons of implementing IFRS in the United States.
With the United States likely moving to IFRS, SLL sees an opportunity to expand their client services. SLL is considering offering a corporate training program. SLL would bring in its experts to train any company required to switch to IFRS. Part of this training would involve SLL IFRS experts working on the revamp from U.S. GAAP to IFRS. As any good employee would want to advance, the new hires see this possibility as a great way to enhance their skills as well as increase their knowledge of IFRS and the client base.
Make a proposal for what consulting services SLL should offer and to whom, inlcuding current auditing clients, other clients, or both.© BrainMass Inc. brainmass.com June 4, 2020, 2:01 am ad1c9bdddf
With increased globalization, markets are increasingly demanding conformity especially in Accounting reporting. Most countries have already implemented the International Financial Reporting Standards (IFRS) towards meeting this conformity through the U.S. still maintains its own accounting standards: the U.S. Generally Accepted Accounting Principles (U.S. GAAP). These accounting standards apply to all countries that issue stock to the public. This paper analyses the pros and cons of implementing IFRS in the U.S. and develops a proposal for which consulting services SLL should offer in training any company to switch IFRS.
Advantages of implementing IFRS in the U.S:
The main benefits of converting to IFRS in the U.S. are increased comparability in financial reporting, lower cost of capital, higher market liquidity, cost savings for multinational corporations, and the opportunity to U.S. businesses of global accounting network (Beke, 2010; Yoon, 2009).
Increased comparability in financial reporting will enable companies all over the world to see companies on the same level. This would increase investor confidence and spur higher investments in the country due to the increased better comparable information that can enable investors make informed decisions. Switching to IFRS would also lower cost of capital and increase market liquidity. This is because as investors are willing to invest across borders, trade increases and integration of capital markets becomes easier resulting to higher market liquidity and a lower cost of capital (Yoon, 2009).
Switching also results to cost savings to multinational companies in the way they prepare their financial reporting, disseminate reports and certify them. This is because they would not have to prepare these reports under different standards in various countries and thereby increasing savings of the company in the long run. Other benefits include eliminating the barriers to efficient ...
The pros and cons of implementing IFRA in the United States are examined.