In 2000, the standard setting body was restructured as The International Accounting Standard Board (IASB) and a new IASB constitution was in effect. The opponent argument is based on differing economic systems, business cultures and institutional framework. The governing bodies of the accounting profession should formally acknowledge that it is their task, among many others, to apply disciplinary procedures when bad professional work, including the non- observance of standards, is brought to their notice. 6. Public Policy, 31, pp.374–398. Account. Available from: jurisdiction/#analysis (Accessed 18 June 2018). The International Accounting Standards Board (IASB) is organised under an independent foundation named the IFRS Foundation. Despite the efforts of convergence, FASB holds a considerable power over IASB since FASB represents world’s largest market where investors and international firms are keen to get in (Crawford et al 2013). Accounting in Europe, 6 (2), pp. Crawford et al (2013) state that purpose of founding IASC was to facilitate entry of UK in to European Economic Committee (EEC) in a dominant role. The components of the overall structure of the IFRS Foundation are set out below. From this point the due process continues in a cyclic manner starting from research programme again. CONVERGENCE WITH INTERNATIONAL ACCOUNTING STANDARDS. However, Georgiou (2010) has found that substantial number of firms which are using IFRSs chose to lobby through indirect methods such as representative organizations like Institute of Management Accountants (IMA). 16 December 2020 Speech: IASB Chair’s virtual keynote in Japan. Copyright 2020 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. If not, the standards issued will eventually become biased and will not match the expectations of end users. Public responses may be received in the form of comment letters. Gordon et al (2012) conclude overall FDI inflows are positively associated with a country’s decision to adopt IFRS. Existing international standards carry a number of distinct benefits to participants, and they serve as an early template for future globally regulated and enforced standards. (Online). Public Policy, 30, pp. This is referred to as its conceptual framework. The IASB (International Accounting Standards Board) The IASB which was set up in April 2001 is the independent standard-setting body of the IFRS Foundation. The accounting standards issued by IASB from 2000 onwards are termed as International Financial Reporting Standards (IFRS). It includes specific and comprehensive details on the new standard or amendment proposed. The IASB assesses costs and benefits in relation to financial reporting generally, and not solely in relation to individual reporting entities. However, the research suggests that accounting quality of US firms is higher. The importance of the conceptual framework for accounting. IASB is the global accounting standard setter whilst FASB sets accounting standards for US. Accounting, Organizations and Society, 9(1), pp. However, IASB is not expected to undertake every research programme. 16 December 2020 Issue 22 of the Investor Update published. About the IASB. European Commission (EC), the predecessor of European Union (EU) was aiming to harmonize accounting practices of member states since 1960s. With the objective of developing a common accounting practice, The International Accounting Standards Committee (IASC) was formed in 1973. IASB should be formally recognised by governments as an international standards setting body. Usually 120 days are allocated to receive public feedback on IASB programmes. It is required by each and every stakeholder for multiple reasons & purposes. They did honour their promises. Apart from this IASB needs to engage investors, national and regional accounting networks and IFRS Advisory Committee in their decision making process. The IASB is committed to developing, in the public interest, a single set of high quality global accounting standards that provide high quality transparent and comparable information in general purpose financial statements. Importance of Financial Reporting. IFRS Interpretations Committee is responsible to interpret applications of IFRSs and provide guidance on financial issues which are not addressed by IFRSs within the IASB framework. It sets out the concepts which underlie the accounts. Control over accounting standards within the European Union: The political controversy surrounding the adoption of IFRS 8. SHUMSKY, T., ROPOPORT, M., 2016. They constitute a standardised way of describing the company’s financial performance and position so that company financial statements are understandable and comparable across international boundaries. However, the level of IASB involvement on the research needs to be clearly mentioned. They can be used in the form of cash, shares or debt. It is necessary to avoid complexity in reporting yet all relevant details have to be provided to users to make informed decisions. The conceptual framework was developed by IASB and it lays down the basic concepts and principles that act as the foundation for preparation and presentation of the financial statements. (Online). The due process is based on three principles which are transparency, full and fair consultation and accountability (IFRS Foundation 2016). These revisions to the financial reporting standards add to the 2017 practice statement issued by the IASB and concludes their deliberations on this important topic. The IASB recognizes that its funding model must maintain the independence of the standard-setting process, while providing organizational accountability. David Ingram has written for multiple publications since 2009, including "The Houston Chronicle" and online at However, IASB also needs to comprehend that there is an alternative standard setter in the form of US GAAP and those who use IFRS should not be disadvantaged due to this. WHITTINGTON, G., 2008. Existing international standards carry a number of distinct benefits to participants, and they … ZEFF, S. A., 2006. The Conceptual Framework sets out the concepts and ideas that underline the preparation and presentation of financial statements for external users. LARSON, R.K. and STREET, D.L., 2004. and SUN, K.J., 2007. Ernst & Young has issued a financial reporting booklet for first-time adoption of International Financial Reporting Standards. 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