Analyze the convergence of U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).
Explain why accounting rules differ from country to country?
Discuss the advantages of a single set of financial statements worldwide. Are there any disadvantages, particularly to the U.S.?
Identify and explain some of the key differences between U.S. GAAP and IFRS standards.
Offer an opinion on whether you personally feel convergence with IFRS is a good idea for the U.S. Support your opinion.
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AE 105878/Xenia Jones
Suggested Outline (for a paper)
1. Accounting rules - why do differ? - 250 words
2. Single set of financial systems - 250 words
3. U.S. GAAP and IFRS - 250 words
4. Opinion - 250 words
Accounting rules differ from country to country simply because the development of accounting principles as well as the demands of the law of each country as it relates to financial systems is unique. Simply put, the financial systems of each country have unique challenges and systems that an accounting methods must take into consideration. Beke (2010) acknowledges that the different accounting systems from country to country impact the way each country does business. To him, multinational corporations must pay attention on the nuanced difference on the legal and financial systems in the countries they operate it to help them design a 'harmonised' accounting system that can be adapted quite easily across the countries they operate in. Mckie (1996) shares that accounting systems are different because of the following elements - technology, people, statutory requirements (legal/law), business rules and culture. ...
The solution is a comprehensive discussion of the intersection of the American GAAP and the IFRS system. Each of the questions listed (see above) are provided an answer, including a personal view. References are listed for further exploration of the topic. A word-version is also attached as a table is also included).