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The Globalization of Accounting Standards: IFRS vs. US GAAP

Global Journal of Business Research, Vol. 3, No. 1, pp. 61-71, 2009

11 Pages Posted: 27 Feb 2010  

Anne B. Fosbre

Georgian Court University

Ellen M. Kraft

Richard Stockton College of New Jersey

Paul B. Fosbre

New Jersey City University

Date Written: 2009

Abstract

The movement of business toward a global economy has accelerated the need to move toward global accounting standards. Two recent decisions by the United States Securities and Exchange Commission, SEC, have had a major impact on the issue of converging US GAAP and international accounting standards. This paper examines the implications of the SEC decision to allow foreign companies to use IFRS in financial reporting without reconciliation to US GAAP on investors, multinational corporations, and global financial reporting. The decision of the SEC to unite world regulators on the convergence of global accounting standards is also reviewed. The European Commission, the Japan Financial Services Agency, and the International Organization of Securities Commission, IOSC are to be included in the International Accounting Standards Committee Foundation IASCF in an IASCF Monitoring Group (SEC, 2008). Differences between IFRS and US GAAP are examined. The authors’ conclusion is that it is both timely and necessary to converge and harmonize IFRS and US GAAP into a single set of Global Accounting Standards. This will lead to a more stabilized and prosperous world economy and it will help to resolve many of the world’s financial reporting problems.

JEL Classification: M40, M41

Suggested Citation

Fosbre, Anne B. and Kraft, Ellen M. and Fosbre, Paul B., The Globalization of Accounting Standards: IFRS vs. US GAAP (2009). Global Journal of Business Research, Vol. 3, No. 1, pp. 61-71, 2009. Available at SSRN: https://ssrn.com/abstract=1555184

Anne B. Fosbre (Contact Author)

Georgian Court University ( email )

900 Lakeood Avenue
Lakewood, NJ 08701-2697
United States

Ellen M. Kraft

Richard Stockton College of New Jersey ( email )

101 Vera King Farris Drive
Pomona, NJ 08240
United States

Paul B. Fosbre

New Jersey City University ( email )

2039 Kennedy Boulevard
Jersey City, NJ 07305-1597
United States

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