Political Influences on Accounting Standards: A Discussion of Gaap & Ifrs (original) (raw)
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Review of International Political Economy, 2006
On 1 January 2005, all stock exchange listed companies in the European Union (EU) began using International Financial Reporting Standards (IFRS) written by the International Accounting Standards Board (IASB). This article argues that the IASB's introduction of fair value accounting reflects and reinforces changed relations of production in which the financial sector increasingly dominates the productive sector, nationally institutionalized economic systems are undermined, and new forms of economic appropriation are validated. As a private body, the IASB has been able to rapidly introduce the fair value paradigm with little public debate outside specialized financial circles. In contrast to more functionalist views, this article argues that accounting standards are inherently political. Accounting numbers provide some of the key economic anchors around which social relations are structured. Accounting techniques cannot be reduced to questions of efficiency since they set out to quantify and compare things which, by their very nature, are neither quantifiable nor directly comparable.
Scholedge International Journal of Business Policy & Governance ISSN 2394-3351, 2016
The Financial Accounting Standard Board (FASB) and the International Accounting Standard Board (IASB) have been working jointly toward the convergence of the U.S. generally accepted accounting principles (GAAP) and the international financial reporting standards (IFRS). However, several arguments still exist as to whether or not U.S. companies should adopt or converge with IFRS. This qualitative study identified the differences noted between rules-based and principles-based accounting, and discussed the impact of these accounting standards on financial reporting. Additionally, several resources were analyzed to understand the path to convergence and the future state of IFRS. The examination of information regarding the transition towards one single set of accounting standards led to the development of two alternate conclusions. Although research allows for the belief that convergence with IFRS is imminent, the fact remains that FASB and IASB will need to work diligently in order to ...
I dedicate this thesis to my parents, Mustafa and Amal Sawani. Without their duaas, patience, understanding support and most of all love, the completion of this work would not have been possible. v ACKNOWLEDGMENTS I wish to give thanks and praise first and foremost to Allah for giving me the strength and fortitude to complete this degree. I wish to thank my family in particular my parents, brother, Ali, whose support was essential to my completion of this dissertation and sister, Abrar, who tirelessly collected data with me. I wish to express my deep gratitude and thanks to Dr. Steve Lin, for his dedication, guidance and enthusiasm in helping me develop my proposal and making this dissertation possible. I would also like to thank the many professors at Florida International University's School of Accounting for their encouragement and guidance throughout the last four years as I worked toward completion of my degree. I would also like to thank my fellow graduate students in the accounting program for their comradery and support. Finally, I want to thank the KPMG Foundation for awarding me the Minority Accounting Doctoral Scholarship for the duration of my time as graduate student. vi
The Globalization of Accounting Standards: IFRS vs. US GAAP
The movement of business toward a global economy has accelerated the need to move toward global accounting standards. Two recent decisions by the United States Securities and Exchange Commission, SEC, have had a major impact on the issue of converging US GAAP and international accounting standards. This paper examines the implications of the SEC decision to allow foreign companies to use IFRS in financial reporting without reconciliation to US GAAP on investors, multinational corporations, and global financial reporting. The decision of the SEC to unite world regulators on the convergence of global accounting standards is also reviewed. The European Commission, the Japan Financial Services Agency, and the International Organization of Securities Commission, IOSC are to be included in the International Accounting Standards Committee Foundation IASCF in an IASCF Monitoring Group (SEC, 2008). Differences between IFRS and US GAAP are examined. The authors’ conclusion is that it is both ...
Introduction to the Special Issue: The Globalization of Accounting Standards (2005)
Business and Politics, 2005
We are currently witnessing the evolution of global accounting standards, as developed by the International Accounting Standards Board (IASB). This is a remarkable development, not only because accounting standards are relevant for all business operations. Whereas accounting standard-setting has previously been a task of national authorities, the process will now be managed internationally by a London-based organisation whose parent foundation is a private company incorporated in the US state of Delaware and mainly financed by the Big Four accounting firms. Furthermore, the US appear to be willing to accept foreign standards that are quite different from their own Generally Accepted Accounting Standards (GAAP). This does not only contradict a widespread perception that equals globalization with Americanization, but also offers a remarkable contrast to US unilateralism in other policy fields. Finally, we are also amidst a major change in the substance of accounting standards, as indicated by a shift from historic cost to fair value accounting within the work of the IASB. This special issue of Business and Politics is devoted to a systematic explanation of these developments, drawing on concepts from International Relations, International Political Economy and Systems Theory.
A political economy of accounting standard setting
In recent years accounting researchers have identified ''political'' lobbying as a problem for accounting standard setting. This paper presents a simple game-theoretic analysis of the political process to identify situations where companies have incentives to lobby the political principal instead of participating in the usual due process of accounting standard setting. Analysis of the model suggests that ''political'' lobbying is more likely to happen in the EU than in the US. Furthermore it is suggested that if the relevant standard setters wish to achieve harmonization of accounting standards between the EU and the US, European companies have more lobbying leverage than their American counterparts because there are more European veto players than American ones.