The Implications of Global Convergence on IFRS for U.S. Regulators, Standard Setters, Accounting Profession and Educators

Abstract:     
Recent progress towards a single set of high quality global accounting standards has been unprecedented. In 2002 the Parliament and Council of the European Union (EU) approved an accounting Regulation requiring listed companies to follow International Financial Reporting Standards (IFRS), adopted at the European level, in their consolidated financial statements. The Regulation applies to accounting periods beginning on or after January 1, 2005. Many countries in other parts of the world also have formal policies or other convergence plans in place. It is estimated that by 2005 IFRS will be required in at least 64 countries for all domestic listed companies and become the most widely accepted accounting model in the world.

This paper discusses these developments and their implications for the SEC, the FASB, and the accounting profession. On this background, questions are raised as to the adequacy of our academic programs. Suggestions for future research are also provided.

Keywords: Convergence, IFRS, Regulation 1606/2002, SEC, FASB

JEL Classification: M41, M44, M47, G38, A20

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