International Accounting Standards Board
The International Accounting Standards Board (IASB) is among the signs that we have truly evolved into a world marketplace independent of any one country's economy. For many years the Financial Accounting Standards Board of the United States was the top authority on business reporting standards. Scandals in American business, however, in addition to the differing needs of businesses in emerging economies has required the international business economy to take a stronger role in setting the standards of international business reporting. "IASC [International Accounting Standards Committee] was founded in June 1973 as a result of an agreement by accountancy bodies in Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland and the United States," (http://www.iasb.org/About+Us/About+the+Foundation/History.htm, 2006). "A role of the IASC, then, is to consolidate many countries' accounting regulations into international standards (Nickoli 18, 1994). The purpose is to make business easier to conduct both between countries and for multinational corporations.IOSCO sees facilitating cross-border securities offerings and multiple listings without compromising the presentation of financial
Yet it is left to individual countries to actually prosecute corporations, individuals, and accounting professionals that validate these rules. When the IASB was created in 2001, it did so with the intention of changing its focus. The IASB's objective of having one single set of high-quality global standards to meet the worldwide aim of comprehensible, transparent and reliable financial statements would be rendered pointless if the auditing firms did not apply rigorous, high-quality global auditing standards to ensure that a fair presentation is given in these statements. The Securities and Exchange Committee played a large role in the creation of the new standards board in the hopes that it would be able to accept financial statements prepared under their rules. But there is still a very long way to go before we reach the world-wide accounting standards that the IASB was formed to create. After January 1, 2005, listed companies domiciled in those and other EU countries are required to use IFRS. In particular, its adoption by the European Union has made commerce more uniform throughout the world. These accounting firms are not part of the government, but their published opinions about the firm are taken as verification all over the world. (Street, 2002) The IASB is committed in its constitution to serving the public interest. Compliance with accounting standards is measured by accounting firms who perform independent audits on the companies. The Constitution reflects a commitment to convergence toward a global financial reporting framework" (Casabona & Shoaf, 2002). "It is evident that the concept of uniformity or standardization has outweighed the notion of harmonizing local reporting. Unfortunately the FASB and the IASB were not able to resolve all of the differences between them. For some time, Australia, Germany and the United Kingdom have permitted foreign companies that issue securities in those countries to prepare their consolidated financial statements using IFRS.
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