International corporate accounting - Essay Example

In 1934 a Securities Exchange Act was formulated giving the SEC a statutory authority of setting up standards for financial accounting and reporting but this would target publicly held companies only. However, the SEC is often dependent upon the private sector in policy formulation. (Financial Accounting Standards Board’s website, 2011) On the other hand, The International Accounting Standards Board (IASB) is an independent, private-sector body based in the UK that develops, approves and promotes International Financial Reporting Standards, whose operations are directed by the International Financial Reporting Standards Foundation.

It was formed in 2001 to replace the International Accounting Standards Committee which had existed since 1973 through an agreement made by professional accountancy bodies from Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland, and the United States of America. Other members became part in the following years. (Deloitte IAS Plus’s website, 2011) The IFRS foundation is an independent, not-for-profit private sector organization working in the interest of the public.

Its objectives are formulating a unified set of high quality and apprehensible international financial reporting standards (IFRSs) that can be enforced and will be globally accepted, promote their application, it takes into consideration the needs of emerging economies and small and medium-sized entities (SMEs) (Financial Accounting Standards Board’s website, 2011).This is achieved through the IASB for development and publishing together with overseeing their interpretation on all the sectors.

In order to achieve global acceptance and adoption of the IFRSs, the IFRS foundation and the IASB involves relevant stakeholders around the world, including investors, national standard-setters, regulators, auditors, academics, and among others. According to Seyfarth (2008) by November 2008, 113 countries