Multiple Financial Accounting Standards Intensify the Dilemma of What to Teach

By Lively, Heather M.; Mastracchio, Nicholas J. | The CPA Journal, October 2012 | Go to article overview

Multiple Financial Accounting Standards Intensify the Dilemma of What to Teach


Lively, Heather M., Mastracchio, Nicholas J., The CPA Journal


Stalled Convergence Presents Challenges for Educators

With the prospect of a completely converged set of accounting standards seemingly no longer imminent, public accounting firms must face complying with different standards for different clients. Moreover, financial accounting instructors face the challenge of teaching multiple accounting standards in one course and fitting this additional subject matter into their curriculum. The discussion below considers the current state of convergence, how it affects the teaching of accounting standards, and what can be done to address this issue.

A Single Set of Standards

Currently, the sets of accounting standards that might be taught in college courses are U.S. GAAP and International Financial Reporting Standards (IFRS). In 2010, the SEC stated that it "has long promoted the development of a single set of high-quahty, globally accepted accounting standards," and, in February of that year, the SEC directed its staff to develop and execute a work plan detailing the incorporation of IFRS into the U.S. financial reporting system (http://www.sec.gov/ spoüight/globalaccountingstandards.shtml). Although the SEC was expected to decide the fate of IFRS in the United States in 201 1, it postponed the release of the final staff report until July 2012 (http://www.sec. gov/spolhght/globalaoeountingstandards^frs -work-plan-final-report.pdf), and its release does not include a firm recommendation.

The idea that IFRS should become the single set of global financial standards had been promoted for some time before the SEC developed its work plan. In May 2005, former FASB Chair Robert Herz stated:

The added costs from having to use this complex hodgepodge (different country reporting standards) of financial information can run in the tens of millions of dollars annually. In the international arena, they can act as a barrier to forming and allocating capital efficiently. Thus, there are growing demands for the development of a single set of high quality international accounting standards. ("In Search of a New Financial World Order," May 2005)

Diverse institutions supported this sentiment. For example, KPMG stated:

The current and growing breadth of IFRS adoption across the world suggests that IFRS has become the most practical approach to achieving the objective of having a single set of high-quahty, globally-accepted standards for financial reporting. Those who share this belief are influenced by the fact that the IASB's structure and due-process procedures are open, accessible, responsive, and marked by extensive consultation.

Defining Issues, no. 7-34, p. 1, November 2007)

And a presidential white paper on regulatory reform stated:

Accounting standard-setters (the IASB [International Accounting Standards Board] and FASB) need to continue to make substantial progress toward adoption of a single set of high quality standards. Improving and eliminating international differences in fair value accounting are key ingredients of regulatory reform of financial markets. ("Financial Regulatory Reform," White House White Paper, June 2009).

Moving Away From Convergence

Recently, the prospect of a single set of accounting standards has dimmed. In December 2011, former SEC Chief Accountant James Kroeker commented on the progress of FASB and the IASB's convergence efforts:

Based on the deliberations and tentative conclusions reached thus far, it is unclear whether the Boards will be able to reach convergence on key aspects of all projects. ... Further, the Boards' reprioritization of certain Joint Projects ... makes it unclear whether these projects would be completed in the foreseeable future and, if so, whether substantial progress towards convergence would be made before any Commission consideration of whether to incorporate JFRS into the financial reporting system for U.S. issuers (A Comparison of U.S. GAAP and IFRS, SEC staff paper, November 16,2011). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Multiple Financial Accounting Standards Intensify the Dilemma of What to Teach
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.