...Pros & Cons of GAAP and IFRS Convergence The International Accounting Standards Board (IASB) was formed in an attempt to bring uniform accounting standards within international countries through its issuing of the International Financial Reporting Standards (IFRS). Today, over 100 countries including Canada, India, and Japan have adopted these standards for financial reporting. The growth of multinational companies such as Coca Cola and the increasing desire of cross-border investing have made it apparent that the U.S.accounting standards known as the Generally Accepted Accounting Principles (GAAP) issued by the Financial Accounting Standards Board (FASB) can no longer remain separate from IFRS. Under the request of the Securities and Exchange Commission (SEC), FASB and IASB signed the Norwalk Agreement, which promised the convergence of GAAP and IFRS by as early as 2015. As a result, it appears that the importance of FASB will decline as IASB becomes the primary responsibility holders of the new merging accounting standards. What advantages and disadvantages can come of GAAP and IFRS integration? Once finalized, the convergence of GAAP and IFRS will create high quality financial reporting that will be uniform amongst companies both domestic and abroad. This will allow investors to interpret and compare financial statements from domestic and foreign countries according to the same accounting standards, which will enable them to make better investment decisions.As the ease...
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...Advantages and Disadvantages of switching from U.S.GAAP to IFRS Nara Yoon Charles Center Summer 2009 Advantages and Disadvantages of switching from U.S.GAAP to IFRS 2 In today’s business, markets are demanding increasing conformity. Many countries have converted to and implemented the International Accounting Standards Board (IASB)’s accounting standards. The United States, however, still maintains its own Financial Accounting Standards Board (FASB). Both IASB and FASB have created International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (U.S.GAAP) respectively. These accounting standards are rules of measurements for financial statements that companies issuing stock to the public must provide to stockholders (Libby, 21). There are various advantages and disadvantages of the U.S. companies changing their systems from U.S.GAAP to IFRS. As the markets have grown to become more complex and global, the disparities between the two standards have been a significant issue as consumers and producers call for reform. The current differences between U.S.GAAP and IFRS affect many aspects of business. There seems to be some future losses but the U.S. is continuing to move toward conversion. The primary benefits U.S. hopes to get are comparability, and thus, greater market liquidity and lower cost of capital. They also hope to see cost savings for multinational companies who keep record of several accounting standards. Most...
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...Title | Examining the Use of Social Media and Its Impact on Corporate Commerce | Assessment A, Part One - Evaluating the Pros and Cons of Different Social Media Sites | Identify the pros and cons for each site. | Digg Con: Not a good way to build buzz in the beginning | Facebook Pro: Ability to incorporate elements of other social media sites | Facebook Pro: Ability to create a community | Facebook Pro: Mass customization - widespread use among target audience | Flickr Con: Limited access from target audience | Flickr Pro: Media convergence - showing text, screen shots, videos | Metacafe Con: Not relevant to the niche audience | Metacafe Pro: Media convergence - showing text, screen shots, videos | Twitter Con: Too much information - public disclosure | Twitter Pro: Instant communication to large groups | Twitter Pro: Ability to post relevant, up-to-the-minute news and updates | YouTube Pro: Media convergence - showing text, screen shots, videos | YouTube Pro: Mass customization - widespread use among target audience | | Assessment A, Part Two - Examining the Use of Social Media and its Impact on Corporate Commerce | Recommend which social media site Master Dynasty should be launched on. | Facebook should be used to launch the game on because you can create a community, you can link other sites and post a variey of media. | | Assessment B - Examining the Use of Social Media and its Impact on Corporate...
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...Evaluating the Pros and Cons of Different Social Media Sites Identify the pros and cons for each site. Blogger Con: Security - possible transmission of untrustworthy links Blogger Pro: Ability to filter comments via an approval mechanism Blogger Pro: Ability to filter comments via an approval mechanism Blogger Pro: Mass customization - widespread use among target audience Blogger Pro: Ability to receive instant feedback from product demographics Blogger Pro: Mass customization - widespread use among target audience Digg Con: Security - possible transmission of untrustworthy links Digg Con: Limited visual presentation of product Digg Pro: Ability to incorporate elements of other social media sites Digg Pro: Media convergence - showing text, screen shots, videos Facebook Con: Security - possible transmission of untrustworthy links Facebook Pro: Ability to incorporate elements of other social media sites Facebook Pro: Instant communication to large groups Facebook Pro: Mobility - viewing on a cell photo adds to the audience Facebook Pro: Ability to post relevant, up-to-the-minute news and updates Facebook Pro: Instant communication to large groups Facebook Pro: Ability to filter...
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...CONVERGENCE OF LOGICAL AND PHYSICAL SECURITY SYSTEMS INTRODUCTION Up to now, majority of organizations have their physical and logical access systems operating as independent structures, with each being run by a totally separate department. The information technology security system, which controls access to information technology infrastructure including mail servers, the internet, database applications and web servers was managed by the department of information technology. The physical security system, which incorporates door access into buildings, systems of life support such as CCTV and Fire, and the badging process of employees, was run by the department of facilities (Mehdizadeh, Y, 2003). Currently, security operations involve the guarding of buildings and equipment in addition to protection of networks, taking care of issues of privacy, and risk management. The interrelation between the aspects of the security initiatives necessitates consolidation of the two security systems. Such a convergence of the IT and physical security functions is important in achieving an efficient security system (Mehdizadeh, Y, 2003). However, such an operation is also lined up with disadvantages. This paper looks at the pros and cons of combining the IT and physical security functions in a medium to large-size firm with complex IT system requirements and a global footprint. It also analyzes the fundamental components of an IT security system and explains how their integration supports...
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...Explain. General Questions - General General Questions Title Examining the Use of Social Media and Its Impact on Corporate Commerce Assessment A, Part One - Evaluating the Pros and Cons of Different Social Media Sites Identify the pros and cons for each site. Blogger Con: Security - possible transmission of untrustworthy links Blogger Pro: Ability to filter comments via an approval mechanism Blogger Pro: Ability to filter comments via an approval mechanism Blogger Pro: Mass customization - widespread use among target audience Blogger Pro: Ability to receive instant feedback from product demographics Blogger Pro: Mass customization - widespread use among target audience Digg Con: Security - possible transmission of untrustworthy links Digg Con: Limited visual presentation of product Digg Pro: Ability to incorporate elements of other social media sites Digg Pro: Media convergence - showing text, screen shots, videos Facebook Con: Security - possible transmission of untrustworthy links Facebook Pro: Ability to incorporate ele...
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...European Union and Turkey Introduction to European Union In this globalization era, the world seems to be borderless, especially in Europe. This further confirmed by the formation of the European Union, which serves as a binding substance between the countries contained in the European continent. European Union is a political and economic based union, established in 1993 after the ratification of Maastricht Treaty. The international organizations are working together to create economic and political stability among member states. During its development, the European Union may not run smoothly. The emergence of the economic problems that rocked the euro zone, then Spain and Cyprus emerged as a "burden" in these economic problems. Another emerging issue is productivity, border policy, and the exchange rate that makes this organization stability unsteady. Another issue that emerged is the exclusivity of the organization. Another issues arising from the exclusivity of membership expansion problem. Preceded by the six founding countries, EU has 28 members now, as Croatia joined on 1st July 2013. The membership number is certain to grow rapidly with the number of countries that volunteered to become a member. Regardless of all the problems it faces today, the EU is still believed to be an organization that brings positive impact to its members. States' desire to be able to join the candidate can not be separated from the success tale of the European Union, particularly in the fields...
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...1. Describe what accounting convergence means and assess the likelihood of the convergence being completed and implemented in the next five (5) years? Accounting convergence is a process or goal to establish one set of accounting standards that can be used internationally by attempting to eliminate the differences in the International Financial Reporting Standards (IFRS) and the US Generally Accepted Accounting Principles (US GAAP). Convergence also seeks to establish understandability amongst users and enforceable by regulators (Erchinger, Melcher, 2007). The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have been trying to implement a global acceptable standard for financial reporting since the end of 2002 onwards (Fogarty, 2011). However to this day in 2013 the convergence of both IFRS and US GAAP has yet to be completed and implemented. The likelihood of the convergence being completely finished and implemented seems possible but yet so far as both the IASB and FASB have already been trying for ten years to get it completed despite the hurdles they have endured. In November 2007 the Securities and Exchange Commission (SEC) voted 4-0 in favor of eliminating the requirements that forces foreign companies with U.S listings to reconcile their results with to U.S GAAP therefore companies with a year end of 2007 are no longer required to follow these set of principles (Fogarty, 2011). 2. Evaluate and describe the...
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...Outline Part 1 Background and Overview Part 2 US GAAP and IFRS Part 3 China GAAP and IFRS Part 4 Summary of Convergence Process Part 5 Pros & Cons of Convergence Part 6 The reasons for differences in accounting practice ww.ifrs.org + The International Accounting Standards Board + The International Accounting Standards Committee (IASC) Foundation + Objective – a single set of global financial reporting standards + Aim – convergence between national standards and international standards + IFRS Framework + IFRS SMEs + Supported by the Group of 20 Leaders (G20) who, at their September 2009 meeting in Pittsburgh, US. Country Status for listed companies as of April 2010 Argentina Required for fiscal years beginning on or after 1 January 2011 Australia Brazil Canada Required for all private sector reporting entities and as the basis for public sector reporting since 2005 Required for consolidated financial statements of banks and listed companies from 31 December 2010 and for individual company accounts progressively since January 2008 Required from 1 January 2011 for all listed entities and permitted for private sector entities including not-for-profit organizations Country China Status for listed companies as of April 2010 Substantially converged national standards European All member states of the EU are required to use IFRSs as adopted by the EU for listed Union companies since 2005 France Germany India Indonesia Italy Japan Mexico Required...
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...Q 1 How would you characterize HD’s core challenge(s) as of the end of 2005? (No grade will be awarded for this question, but, answering it will help to focus your thinking.) Q 2 Deconstruct HD’s world with PEST, with PORTER and with CRACK. Quantitatively, how healthy is HD? (5%) Q 3 Shortlist the three best go-forward options with pros and cons. (5%) Q 4 What is your top go-forward choice and why. Apply forecast modeling to it, looking 3 to 5 years forward. This is to say, what convergence of key impact points would plausibly create a worst case scenario and how would that impact key forecasts like gross revenues, profit, et al? Would HD still be ok following your recommendations? What conditions would make a best case scenario to support your recommendation and what would key outcomes look like? What are the most probable impacting points and how do you envision this will play out as HD moves forward with your recommendation? (5%) Q 5 If HD executed your recommendation would you buy HD stock if money was available? Why? Why not? (No grade will be assigned, but, answering will reflect confidence in your recommendation.) In answering these questions, go for quality over quantity – time is money. Avoid repeating facts from the case as this in itself does not add further insight. Rather, synthesize and read between the lines. Ask important questions. Given that, prepare this as though it is for the CEO of HD, with stock portfolios...
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...1.0) INTRODUCTION 1.1) Background and Overview “All families are alike, and all families are different” said Wayne Upton, Director of International Activities for the International Accounting Standards Board (IASB). It means that every country have their own accounting standards. There are many accounting standards in the world, with each country using a version of their own generally accepted accounting principles, also known as GAAP. Dissimilar financial reporting and accounting practices make it very difficult for users of accounting and financial reports to consolidate such information and make comparisons of firms that are listed in different countries (Prather-Kinsey, 2006). The complication arises when the firm does business in multiple countries. How can corporations be compared based upon their financials, which one are accurate, and how can investors then deal with multiple standards, which ones are accurate? The answer to these questions lies within the adoption of the International Financial Reporting Standards, or IFRS. IFRS are currently required or accepted in over 100 countries worldwide, and it looks certain that the number of countries to embrace IFRS will continue to rise over the coming years (Daske, Hail, Leuz& Verdi, 2008). It was already noticed that, IFRS issued by the IASB have been extremely doing well in terms of their acceptance and application on a worldwide basis. IFRS is the standards which is being developed and supported by the IASB....
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...(1) The article on global accounting convergence by Hail, Leuz, and Wysocki (Part 1) examines several factors to consider regarding the potential adoption of IFRS by the United States. Overall, based on the article, do you think the adoption of IFRS by the United States is a net gain for the US marketplace? Give three reasons to support your position (be specific). Please include specifically what groups will be affected and why IFRS would be better or worse than US GAAP. 1 2 I believe that adopting the IFRS would be a net gain for the United States. Many countries have already moved to adopt these standards. As of 2011, over 120 countries were using IFRS as their main accounting standard system. IFRS has the potential to facilitate cross-border comparability, increase reporting transparency, decrease information costs, reduce information asymmetry and thereby increase the liquidity, competition and efficiency of markets (Choi & Meek, 2005). * By adopting the IFRS, the country's businesses would be presenting financial statements on the same foundation that foreign companies would. This would make comparison between global competition much easier. It would also make it easier on the companies based out of the U.S. that do business globally, because now they would only have to present their financial statements based on one set of standards, rather than multiple sets. Currently, the U.S. operates off of GAAP, so those businesses with subsidiaries overseas have...
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...A single set of global accounting standards, rules to be followed by any public company as it reports annual operating results, has become the Holy Grail of Accounting. In today’s world, these rules are embodied in International Financial Reporting Standards. Unfortunately for many good but unwitting people, advocating the U.S. adoption of IFRS is a fool’s errand. To more fully understand the ramifications of this statement let’s turn to the dictionary for a basic frame of reference. Grail [greyl] –noun (from dictionary.com) Also called Holy Grail. a cup or chalice that in medieval legend was associated with unusual powers, esp. the regeneration of life and, later, Christian purity, and was much sought after by medieval knights: identified with the cup used at the Last Supper and given to Joseph of Arimathea. Informal. any greatly desired and sought-after objective; ultimate ideal or reward. Can we adapt the word’s definition to fit into the context of accounting? You beta. Holy Grail [greyl] of Accounting –noun (The Summa) Universally adopted set of global accounting standards that in modern urban legend is associated with unusual powers, esp. perfect transparency in corporate financial disclosure, universal comparability, ethical business purity, optimal investor returns, cross national and international economic stability, and is much sought after by various economists, politicians, governmental regulators, large audit firms and executives of...
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...Briefly outline the reasons why the United Kingdom ‘’opted out’’ of the European Monetary and Economic Union (EMU). In retrospect, was this a good decision for British business? The European Monetary and Economic Union A giant step in the history of a unified Europe has been the creation of the European Economic and Monetary Union (EMU). Coordination of national economic policies is anticipated to be fair to all EU member states in terms of them all sharing a single market and being part of the EU trading block. As stated on the official website of the EU , ‘’coordinated policies reinforce the EU’s unique mix of market dynamism, social cohesion and environmental responsibility to deliver more growth and jobs’’. Launched at the Hanover Summit in June 1988, chaired by the President of the European Commission, Jacques Delors, the EMU has started off as an encouragement of practical and realistic way of achieving an even more united Europe with a single currency as one of its main targets. In the rather positive view of the European Union, the EMU is said to mutually reinforce the national policies of member countries resulting in ‘’more growth, more jobs and a higher level of social welfare for all’’ (Europa, 2008). However, several countries have chosen to opt out of the EMU, notably the United Kingdom of which is going to be the key note of this essay. It is important to look into the reasons for which the UK has decided to opt out of the EMU and evaluate the results...
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...This article was downloaded by: [Library Services City University London] On: 26 July 2013, At: 08:32 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Accounting and Business Research Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rabr20 International Financial Reporting Standards (IFRS): pros and cons for investors Ray Ball a a University of Chicago Published online: 28 Feb 2012. To cite this article: Ray Ball (2006) International Financial Reporting Standards (IFRS): pros and cons for investors, Accounting and Business Research, 36:sup1, 5-27, DOI: 10.1080/00014788.2006.9730040 To link to this article: http://dx.doi.org/10.1080/00014788.2006.9730040 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information...
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