Accounting and the Developing World - The Implementation of International Accounting Standards in the United States

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Accounting and the Developing World - The Implementation of International Accounting Standards in the United States

Introduction

The main aim of conducting this research is to find out the response of all the US companies that are operating internationally and domestically towards the accounting developments in the world. The research will also enable us to find out the changes in the accounting methods, principles and procedures adopted by different firms due last few years. It will also try to find out that has there any change occurred in the accounting functions of the organization due to the changes occurring in the legal environment. Thus the research will help all the stakeholders like shareholders, creditors, suppliers and etc. to rely on the information that it is accurate and transparent. All the organizations operating in the economy of US have two follow two kinds of accounting standards. The most generally used accounting principle is GAAP which means Generally Accepted Accounting Principle and the other one is IAS meaning International Accounting Standards. Recently globalization has spread all over the world and thus it is necessary for organizations that are involved in global business that they should implement both or either one of the accounting principles in order to ensure that all the activities are transparent and fair. If organizations were only involved in running their operations in only US then they would only have to implement GAAP while practicing accounting in their organizations but due to development of international trade thus international accounting standards need to be followed.

In US, 99% of the companies are involved in international operations therefore both accounting principles are to be followed by these firms. Thus the research will provide the response of these firms regarding the implementation of accounting principles and it will also find out the pros or cons of implementing the international and domestic accounting standards. The accounting standards and principles are designed by the International Accounting Standards Board (IASB) that provide an assurance that the firms involved in the international operations and activities will have to prepare their books of accounts, present their financial information, prepare their financial statements and record the entries in different accounts according to the international standards set by the board. Thus overall the research will emphasize on the importance of following the international accounting principles for the organizations that are involved in the global activities.

Research Questions of the Study

The research will be conducted to find out the answers of the following questions:

1) How will the firms react towards the implementation of the International Financial Reporting Standards in the companies in United States?

2) How are the social, cultural and political factors influencing on the companies in US that are implementing International Accounting Standards?

3) What are the advantages and disadvantages of implementing international accounting standards among all the US companies that are involved in the international activities?

4) What are the measures taken by the ...