Article: Accounting Changes need Global Reach
Summary: Accounting should be changed to make to be the same worldwide. Now that the recession is ending, the U.S is calling for changes in the accounting system to make it consistent with everywhere else in the world. The SEC is in the process of making U.S companies change their accounting procedures by 2014. The U.S would use the IFRS (International Financial Reporting Standards) instead of the current GAAP (Generally Accepted Accounting Principles)
Connections: GAAP is a set of rules that accountants in the United States currently follow. The IFRS is an accounting system that is being adopted in some countries like Russia and Canada. Accounting rules are important for fair practices and having them consistent throughout the world is important for companies that want to enter the U.S market. Accountants would also only need to learn one of the two procedures which would make it easier to do accounting in other countries.
Reflection: I think that it is important for accounting procedures to be the same all over the world. It would make accounting simpler and less complicated. The only downside I could possibly see from this is that it would be expensive to switch procedures. If this were to be enforced to all companies in the United States, it could be expensive for the small businesses to adapt to the changes.
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I also think that it is important that the world has the same accounting procedures because it will be easier for accountants to understand the crisis that are caused during a recession in businesses. If all accountants only need to learn one two procedures( GAPP and IFRS) they would be able to do accounting all over the world and find a job in any country. I also agree that it will really expensive to change this in just fours years and that it would be difficult for the accountants who only know the GAPP procedures to work. Therefore all accountants who are only familiar with the GAPP would have to go back to school and learn the IFRS new method that the US would like to switch. In my opinion it is great that the accounting procedures will all be in sync. But I think they are switching to the IFRS a bit too quickly, instead of totally switching everything to the IFRS in 2014, they should gradually add parts of the new system in. It would be more accessible for the accountants to get use to.
ReplyDeleteColleen Chong