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Change in Accounting

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Change in Accounting

AC114/Accounting 1

Change in Accounting

With everything, there is a time when changes are proposed to try to better a situation and make it more comprehensive for everyone. Saying this, there is a proposed change to the way the United States does accounting and financial preparations. Should we shift from U.S. GAAP to IFRS?

I do not think that we should shift from U.S. GAAP to IFRS. I am attending Kaplan University at this moment to complete my Bachelor’s of Science in Accounting. Saying this, I do not want to have to go back to school to learn a new method of accounting and way of reporting financial statements.

The second reason to not change to IFRS is that the United States has been using it’s own method for reporting financial statements for this long. Not to mention the fact that everyone is used to using this method. I do not think that it would be worth the time and money to get people trained on this either, especially if they are not interested in the new method. Saying this, if it’s not broke, don’t fix it.

The differences of earnings between U.S. GAAP and IFRS have been studied. “We find that US GAAP and IFRS earnings perform equally well on value relevance, timelines and accruals quality” (Van der Meulen, Gaeremynck, & Willekens, 2006, p. 2). Although they perform equally in these categories, U.S. GAAP performs better in predictive ability (Van der Meulen, Gaeremynck, & Willekens, 2006). I think predictive ability is a good thing to perform better in because companies can better prevent mishaps from occurring.

Although some people are for the change, many are not. More schooling would have to be completed for everyone involved, when the U.S. GAAP equally performs to IFRS. Saying this, there would be more heartache than good occurring with the change. References
Van

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