Accounting Standards Boards - Essay Example

? ACCOUNTING STANDARDS BOARD (Your teacher’s due 1 Relationship between IASB and FASB. The IASB main aim isto make international financial reporting standards while FASB focuses on a rule based approach. The two boards IASB and FASB are working together since 2002. This concept of convergences rose in 1950’s, which was a reply to the integration of World War II and due to the increase in the flaws of capital management. This convergence was done in order to improve the two main US accounting principles i.e. IFRA and GAAP. China and Japan also worked in this coverage of two boards. In accordance with the 2010 reports, the Securities and Exchange Commission’s have issued a statement of global accounting standard and convergence in order to direct the SEC staff. This was done to make a work plan which should be used to incorporate IFRA standards in US financial reporting system (Colson, Robert H, 2003, p.22). A brief history on the relationship of these two boards is described below: Interest of international accounting began in 1950s due to the integration of World War II and due to the increase of capital flaws in the systems. An international congress of accountant was hosted by American Institute of Certified Public Accountants in 1962. It discussed the steps for the development of accounting, auditing and other reporting standards. The first textbook of international accounting was published in 1967 which was written by a member of FASB. IASB and FASB relationship was informal one. But in 1988 FASB became a member of IASC which meant that FASB was able to participate in the meetings of IASC. In 1993 FASB and its counter party conducted a joint venture project. This resulted in the improvement of in the relationship and standards of these two boards. In 2000 use of international accounting standards increased rapidly due to which IASB and FASB decided to collaborate and explore US international standards. IASB and FASB finally decided to collaborate and work together in order to improve the US accounting standards. This partnership has been mentioned in “The Norwalk Agreement.” A memorandum of understanding was issued by both of the boards in 2006. It described the targeted performance they hope to achieve by 2008. In this MOA they shared their common objective with high quality accounting standards. Both the boards completed the first joint project and issued a converged accounting standard on business combination in 2007. FASB and IASB updated its memorandum of understanding in 2008 in order to establish convergence goals of 2011. FASB reported the status of their project in order to converge and improve UC GAAP accounting standards in 2010. First quarter congress report was issued by both the boards which reported modification of their joint work plan. A progress report was issued by both the boards in 2011. It reported the progress of the convergence work program. In this report it gave priority to the three main areas i.e. leasing, financial instrument and revenue recognition. 1.2 IASB equivalents of the FASB original pronouncements FASB and IASB mainly establish standards in relation to finance and accounting which helps nongovernmental organizations to prepare financial statements. FASB major pronouncement is to develop the principles of general accounting, while IASB focuses on international financial reporting analysis. This indicates that IASB is not equivalent of the pronouncements of the other board. There exists difference in the practices of both the boards. FASB uses a rule based approach, which differs from the principles of IASB; it focuses on techniques, processes and organization. In spite of these differences in the original pronouncement, both the boards have agreed to converge for the best interest of financial economy. This means that the main reason of the convergence was to set universal standards of accounting. In order to reduce these differences meetings were conducted by auditors to ensure the success of both the boards. FASB assist in preparing financial statements and accounts reporting in US, while IASB provides international and high quality accounting standards. Both the boards are involved in same practices, only the difference exists in its coverage. So, IASB is not equivalent to the pronouncement of FASB because it covers national accounting standards (Donnelly Shawn, 2007, p.118). 1.3 MSA program MSA program prepares the student for a professional life within the accounting vocation. It offers an option to students to specialize in finance. It makes students multi disciplinary, rigorous, management of theoretical analysis and provides knowledge in relation to banking, finance, investment, statistics and management. This program prepares the students for the professional life by taking their exams in the field of accounting which includes the Certified Public Accounting and Certificate in Management Accountant exams. It gives professional education to the students in relation to research, business law, financial analysis and advanced auditing. Such courses provide a detailed knowledge to students in relation to procedures and techniques used in the financial sector. It makes students prepare for their carrier in advance. This program prepares students to be professional accountants rather than other graduate who cannot work as a professional just after completing their studies. MSA program provides all knowledge and skills to the students so that they can start working as a professional just after completing their studies, because all techniques and tools used in market to deal with finance sector have been taught to the students during this program (Breen H Edward, 1967, p.87) This program assists students in building their professional life. After completing this program students have competencies in the following areas: Proficiency in management of international and domestic affairs of a company. Develops knowledge, abilities and skills to influence organizations strategies Research capability in order to integrate the theories and concepts in career and occupational life. Futuristic and contemporary approach to solve the issues related to global finance. Promotion, practice and integration of ethics in organizational structure. Entrepreneurial skills for application and idea creation for financial organizations. References Breen, H. Edward. (1967). Wharton's Master of Science Program: A Progress Report. Journal of Accountancy, 12(1): 87-89. Colson, Robert H. (2003). FASB Charts a New Course. CPA Journal, 73(2): 22. Donnelly, Shawn. (2007). The International Accounting Standards Board. New Political Economy, 12(1): 117-125. . Read More