Dq2 Acct 561

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In what specific ways do the two sets of standards differ from one another? GAAP (generally accepted accounting principles) is a general accepted accounting principles or sets of rules, accounting principles, and standards that are used in specific countries, regions or industries. The IFRS (International Financial Reporting Standards) purpose is to provide users with a reporting entity that is “useful to all stakeholders of the entity” (Veronique Weets, 2013) If the United States adopted IFRS standards, what would be the advantages and disadvantages? Some of the advantages of the United States adopting IFRS standards over GAAP are: number one, “the international accounting standards are vital to make allocating capital easier and more effective in the global scale” (Victor Smart, 2013). Number two because of the publication of the Norwalk Agreement in 2002, “both Financial Accounting Standards Board (FASB), converged with IFRS; the idea is to streamline the numbers of differences between (IFRS) and (US GAAP) requirements and “in addition to tightening up certain areas, the revision developed the previous (IFRS)” (Shan Kennedy, 21013) Disadvantages: “Presently, the widespread use of US GAAP rather than IFRS can create difficulties for financial analysts, given the challenges in making financial comparisons” (Veronique Weets, 2013). Does it make sense for U.S. companies to change to IFRS? Why? Provide examples with your explanations. It makes perfect sense for the U.S to change to IFRS, especially after some of the worse accounting scandals of Enron in 2001, and WorldCom in 2002. ” First adopted in 2001, IFRS includes many of the International Accounting Standards (IAS) previously set by the IASB with the objective of improving the level of transparency of companies’ finances” That is one of the reasons the United States congress passed the
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