Accounting_Standards_Boards

Accounting Standards Boards Brian Joseph Stevens ACC/541 September 29, 2010 Heber W. Howard, Certified Public Accountant (CPA) Accounting Standards Boards In this paper I will address two main topics beginning with the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) history, relationship, and cooperative efforts on the convergence project and then transition into how the Master of Science in Accountancy (MSA) program prepares students for professional life within the accounting vocation. Brief History and Relationship of Accounting Standards Boards The International Accounting Standards Board and the Financial Accounting Standards Board both have histories of evolving and restructuring out of previously formed organizations intent on continuing to generate quality financial standards like their predecessors. Since 1973 the Financial Accounting Standards Board officially has been recognized as the authority of the national accounting standards for the United States of America by the Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA). The International Accounting Standards Board started in 2001 has grown rapidly and has a large group of nations that officially recognize their financial standard. The International Accounting Standards Board has a mandate to produce a single set of high quality, understandable, enforceable standards that nations will be encouraged to adopt and use. The International Accounting Standards Board works closely with many other accounting standard setting organizations around the world as it endeavors to fulfill its mandate. The International Accounting Standards Board was modeled after one of its most important partners, the Financial Accounting Standards Board of the United States (Gornik-Tomaszewski & McCarthy, 2003). Equivalents of Pronouncements Accounting Standards Boards The International Accounting Standards Board and the Financial Accounting Standard Board each currently have their own set of standards. The International Accounting Standards Board has the International Financial Reporting Standards (IFRS) that take a principal based approach. The International Financial Reporting Standards are a combination of the board’s predecessor’s standards called the International Accounting Standards (IAS) that have been amended and adopted, or adopted in there entirety, or they have generated their own and adopted them after 2001. The Financial Accounting Standards Board has Generally Accepted Accounting Principles (GAAP) that takes a rules based approach. The Generally Accepted Accounting Principles like the International Financial Reporting Standards are a combination of the boards’ predecessor's standards that have been adopted and their own four types of pronouncements called Statements of Financial Accounting Concepts (SFAC), Statements of Financial Accounting Standards, (SFAS), interpretations, and technical bulletins. Accounting Standards Boards Convergence Project The International Accounting Standards Board and the Financial Accounting Standards Board have been working as partners for the greater part of the current decade to bring each organization’s standards into harmony with the others. This partnership has developed to support a healthy global capital market, improving the ability of investment comparisons worldwide, and allowing cross border transactions to be more transparent and reliable (FASB, 2002). Early in their relationship both organizations established a commitment to identify high-quality solutions, using both groups best efforts to achieve compatibility and common solutions (Schroleder, Clark, & Cathey, 2005). A significant step was the “Norwalk Agreement,” a memorandum of understanding that formalized both organizations commitment in October 2002. The “Norwalk Agreement” established that there would be a short-term project dealing with simpler issues first to be completed by 2005 and a longer term ongoing project to address more difficult issues as well as coordinate their future work programs. Though there still are and will continue to be financial accounting issues cropping up, both organizations have performed and worked together with a considerable amount of restraint to accomplish a projected beginning use of International Financial Reports Standards within the United States capital market by publicly traded business in 2014 if they elect to do so. The complete acceptance of International Financial Reporting Standards by the Financial Accounting Standards Board will hinge on approvals by two United States government entities, the Securities and Exchange Commission responsible for financial accounting enforcement and the Internal Revenue Service (IRS) responsible for tax collection. Master of Science in Accountancy Master of Science in Accountancy students are prepared with a blend of theory and advanced skills necessary to be successful in their professional lives within the accounting vocation. Program courses are prepared for students with or without accounting background to gain a firm understanding of required concepts necessary to obtain their license to practice as a Certified Public Accountant (CPA). University of Phoenix recognizes that accounting is not static and uses a research based approach along with testing preparation software to help students keep up with the ever changing accounting environment. Upon completion of the Masters of Science in Accountancy program, they will have been provided the opportunity to gain the necessary knowledge in accordance with National Association of State Boards Accountancy (NASBA) and American Institute of Certified Public Accountants (AICPA) to obtain success passing the Certified Public Accountant (UOPX, 2010). The Financial Accounting Standard Board and International Accounting Standard Board have faced and overcome many difficulties and challenges along their substantial journey to convergence. The accounting standard future will bring many benefits and short-term challenges. Users of this convergence will ultimately benefit. The worldwide conformity will generate many opportunities for businesses and accounting firms in the future. A level playing field will help establish the desired global equality that the Financial Accounting Standard board and International Accounting Standard Board are striving for. After completion of the Masters of Science in Accountancy students will be valued additions to either private or public sector organizations. The University of Phoenix research approach will enable students obtaining their Masters of Science in Accountancy, to be prepared with knowledge of current events in accounting as well as for the multitude of diverse structures, cultures, and missions of their future employers with positions in career areas such as accounting, auditing, and budgeting. References Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2005). Financial Accounting Theory and Analysis (8th ed.). : John Wiley & Sons, Inc.. Sylwia Gornik-Tomaszewski; Irene N., M. (n.d). Cooperation between FASB and IASB to achieve convergence of accounting standards.(the Financial Accounting Standards Board, the International Accounting Standards Board). Review of Business, 24(2), 52. Retrieved from Gale: Academic OneFile (PowerSearch) database. University of Phoenix. (2010). Master of Science in Accountancy. Retrieved October 1, 2010, from http://www.phoenix.edu/online