Question

Question 1

The IASB and the FASB are currently engaged in several efforts to attain a uniform set of international accounting standards. Among these efforts are:

1. The FASB's Short-term International Convergence Project
2. The Norwalk Agreement
3. The Roadmap to Convergence."

Discuss the three approaches and comment on their effectiveness in obtaining the desired outcomes

Question 2

Discuss the advantages and disadvantages of harmonizing accounting standards internationally.

Answer 1

Q1

IASB

The IASB was established in 2001 and is the standard-setting body of the IFRS Foundation, an independent, private sector, not-for-profit organisation. The IASB is committed to developing, in the public interest, a single set of high quality global accounting standards that provide high quality transparent and comparable information in general purpose financial statements. In pursuit of this objective the IASB conducts extensive public consultations and seeks the co-operation of international and national bodies around the world. The IASB has 15 full-time members drawn from 11 countries and a variety of professional backgrounds. By 2012 the Board will be expanded to 16 members. Board members are appointed by and accountable to the Trustees of the IFRS Foundation, who are required to select the best available combination of technical expertise and diversity of international business and market experience. In their work the Trustees are accountable to a Monitoring Board of public authorities. For more information visit www.ifrs.org.


FASB

Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.

Q2. Advantages of harmonizing accounting standards

     There are definite advantages to 1.harmonizing accounting standards, although in my opinion, in reality, I do not think we will ever actually see it happen, because it will create more problems than it solves. The main advantage is that it would provide a uniform, standard medium for accounting, including financial reporting. All investors all over the world would be looking at financial statements in the same format, regardless of location.

Disadvantages

1.Accounting standards integration problems

2.Negetive effects on U.S.Small businesses

3.International sovereignty issues

4.Licencing and enforcement obstacles