A research-based perspective on the SEC’s proposed rule—roadmap for the potential use of financial statements prepared in accordance with international financial reporting standards (IFRS) by U.S. Issuers
Summary
Jamal, Bloomfield, Christensen Colson, Moehrle, Ohlson, Penman, Stobar, Sunder and Watts (2010) discussed the most five important issues out of 70 issues, which were mentioned in the proposal of SEC. That proposal was about to develop a roadmap for the application of IFRS. SEC was looking for comments on that proposal. Financial accounting standards committee is a part of American Accounting Association (AAA) formulated by following comments. This paper is explanatory in nature. Following are those five issues, which were discussed in that paper.
- Is there a demand to have one set of accounting standards?
- What effect will it have on auditors and audit quality?
- What views do market participants have on governance and funding issues of IASB?
- Reconciliation for comparing companies from IFRS to GAAP.
- What guidance should be available for IFRS users related to other issues?
Any particular format of reporting financial statement cannot give the best output. Superior results can be achieved when companies have choice to pick particular format between GAAP and IFRS. It is recommended by researchers to U.S. companies to use any accounting standards like International Financial Accounting Standards (IFAS) or Generally Accepted Accounting Principle (GAAP). It will be initial step to adopt IFRS in the United States of America. It will help auditors, makers and investors to fall in line with IFRS or simply follow GAAP for financial reporting.
In that paper, researchers were strongly agreed with the recommendation given in that proposal regarding the attention given to auditing. Initially verifiability was not given as much importance as it should have been given. It was necessary to have coalition between audit and accounting standards. FASB and IASB were paying less emphasize on verifiability, which was the key concept in the making of new standards...................
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