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IFRS vs GAAP: US Business Relevance

   

Added on  2020-04-07

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IFRS vs GAAP: US Business Relevance_1

CORPORATE REPORTINGINTRODUCTIONThe International Financial Reporting Standards (IFRS) are the standards meant to guide. Monitor and control business operations that relate to finances and accounting. These standards are provided by the IFRS Foundation and the International Accounting Standards Board (IASB). The function of the policies and laws of the IFRS is to help business organizations manage their financial accounts effectively (Diana-Andreea, 2014). Additionally they also help businesses understand these records easily. Therefore, they are used by business accountants when comparing information and to determine whether the information is reliable, relevant or valid (Trăistaru, 2015). These standards are currently being used by a large number of organizations nowadays. The IFRS adoption is becoming a common operation for many businesses recently.Over the recent number of years, IFRS adoption in the US has become a challenge and therefore many businesses have given up the adoption and instead most of them are using the GAAP standards provided by the FASB. The IFRS has not been used especially by public business organizations. The adoption is caused by a number of problems that exists between the IASB/FASB and the IFRS. These problems relate to the implementation of additional of different rules and policies to the IFRS standards (Hillman et al, 2017). In addition to that, research has shown that it is difficult and risky for business organization in the US to adopt the IFRS standards (Lourenço et al, 2015). There are immense implications and problems that can affect business operations and productivity.The following are some of the reasons why the IFRS adoption is a challenge for the US business organizations.DISCUSSIONUnreliable US Business EnvironmentThe business environment for the US business organizations regularly fond of disputes. During such disputes, most businesses opt to report the matter to the law which involves the court in solving the dispute. This is the case especially in the accounting or financial sector of businesses.If the IFRS standards are used in the US, the chances of the accountants or financial reporters being sued and blamed in case of a mistake are very high. In US the accountant is liable to any mistake that may happen when carrying out their professional duty. For this reason, the 2
IFRS vs GAAP: US Business Relevance_2

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