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Globalization's Impact on International Accounting Standards

In: Business and Management

Submitted By ctrim1212
Words 871
Pages 4
The topic of globalization is one of much controversy among individuals in today’s society. Globalization, a process driven by international trade and investing to create a more unification among nations worldwide economically, politically, and socially, has expanded immensely in recent decades. Individuals argue that globalization has been around since the 15th century due to exploration of persons such as Christopher Columbus and Vasco da Gama; but it wasn’t until the late 19th and early 20th centuries that globalization began to steadily become more prevalent due to the advancement in transportation methods. Since then many other technological advancements, especially that of communication, have played pivotal roles in the movement towards globalization. Although this movement may seem appealing to a variety of entities and especially consumers due to the overall decrease in price of goods, for the most part; there are variety of negative implications associated with the movement as well. In this composition will be information pertaining the impact globalization with have on global accounting standards.

Currently there are two sets of accounting standards to take into consideration for this transition in the United States. The first of which being International Financial Reporting Standards (IFRS). IFRS, a more “principle based” method used in over 110 countries including the countries part of the European Union, is monitored and regulated by the International Accounting Standards Board (IASB). The second being United States Generally Accepted Accounting Principles (GAAP). GAAP on the other hand, a more “rules based” method used in the United States, is monitored and regulated by the Financial Accounting Standards Board (FASB). These two accounting standards have similarities and have grown closer in relation recently, there are also significant differences...

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