Overview
What do you think accounting is?
Is accounting an art or a science? Consider
Is there only one correct Net Income amount?
Status of IFRS in US
In November 2008 the U.S. Securities and Exchange Commission issued a
proposed "roadmap" for a potential transition by U.S. issuers from U.S. GAAP to
International Financial Reporting Standards (IFRS.) Under the timeline
contemplated on this roadmap, the SEC would consider in 2011 whether to require
all public companies to adopt IFRS on a phased-in basis starting with large
accelerated filers for years ending on or after December 15, 2014; accelerated
filers for years ending on or after December 15, 2015; and non-accelerated filers
and smaller companies for years ending on or after December 15, 2016.
In June 2009, President Obama announced his administration's proposals to
reform the U.S. regulatory system, recommending that the FASB, the IASB and
the SEC make substantial progress toward a single set of high quality global
accounting standards by the end of 2009.
In February 2010, the SEC issued a statement reiterating its commitment to a
single set of high quality global standards and for the convergence of IFRS and
US GAAP. The SEC directed the staff to develop a work plan to facilitate the
SECs consideration in 2011 whether, and if so, how and when, to incorporate
IFRS into the financial reporting system for U.S. issuers.
Concerns raised
FASB
AICPA
Codification
SEC
The Sarbanes Oxley Act (SOX)
PCAOB
IFRS
IFRS for SMEs
Individual countries
Jurisdictional IFRS
US Standard Setters
FAF
Finl Acctg Foundation
Oversees FASB, Appts
FASB & FASC members
FASB
Finl Acctg Stds Board
Establish & improve
accounting standards
FASAC
Finl Acctg Stds Advisory
Committee
Advises FASB on policy
SIC
EITF
Standing Interpretations
Emerging Issues Task Force
Committee
How to acct for new business
Specific application guidance
issues that arise
2.
3.
4.
5.
Independent
Financially literate
Must approve all services performed by audit firm
Responsible for retaining and terminating the auditor
Firm must disclose financial experts on the audit committee
Independent
Financially literate
Must approve all services performed by audit firm
Responsible for retaining and terminating the auditor
Firm must disclose financial experts on the audit committee
IFRIC
Intl Fin Reporting Interpretations
Committee
Develops interpretations of stds that
To be approved by IASB
SAC
Stds Advisory Committee
Consults w/ FASB
Trust
Trust drives the accounting profession
SOX, PCAOB, and class action lawsuits are a
result of a breach of trust
From a broad perspective, we pay a heavy price
for low trust:
Waits at airports, audit fees