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Goodbye GAAP

It's time to start preparing for the arrival of international accounting standards.

Sarah Johnson, CFO Magazine
April 1, 2008

IFRS/GAAP Convergence

I am an Arizona State University student and just completed my thesis on convergence. One must understand, every country needs to have a secondary set of rules to meet local issues and individual company issues that are not addressed by IFRS. Many writers on the topic seem to forget this point.

Posted by Janis Newcomer | April 25, 2008 01:02 pm

IFRS Will Not Make Fraud Easier

One reader commented that fraud would be easier under IFRS and then listed a number of major US companies where fraud have occured..contradicting? It is not the accounting principles that results in fraud, but the lack of internal controls combined with the general US If-I-am-not-caught-I-didn't-do-anything-wrong attitude.

Posted by Jimi Meshulam | April 10, 2008 05:54 pm

Let's be clear.

The term convergence continues to be misleading. It implies that, by definition, it will ultimately lead to a hybrid of US GAAP and IFRS. This is not necessarily true. The objective was never to meet somewhere in the middle, but to develop a global standard based upon the best available thinking in the field, regardless if that resembled US GAAP or not. So for those companies who are hoping that the IFRS will eventually look like US GAAP, it may or may not. The FASB and the IASB are committed to creating standards that make the most sense and clearly depict the economic circumstances of the firm. It is my hope that we start calling a spade a spade, ie. IFRS are not converging with US GAAP, but rather are being developed in deep consultation with accounting standards setters around the globe, including the FASB. (Perhaps, the term "convergence" only sounds good to those who are afraid to wander too far from home.)

Posted by Ramona Dzinkowski | April 03, 2008 04:10 pm

IFRS will make fraud easier and more prevalent.

The International Financial Reporting Standards (IFRS) have not been written with consideration of actual and potential abuses and frauds in mind. Even GAAP is weak on this point, as no member of FASB has ever had any training in fraud prevention or detection. However, GAAP is far better than the scanty standards of the IFRS. With the so-called convergence, the world should be prepared for much larger Enrons, Worldcoms, Halliburtons, Quests, Peregrines, Sunbeam Products, Waste Managements, and so on and so forth. Shareholders will need to brace themselves for the forthcoming torrent of frauds--but this time, they may have far less recourse, with the loosy goosey IFRS.

Posted by Ralph Adamo | April 03, 2008 03:44 pm

Will France accept IFRS?

The French government requires a set of books kept in the government dictated chart of accounts. Will IFRS simplify the international situation? Not if the countries don't go along with it?

Posted by Rod Scott | April 03, 2008 10:41 am

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