Case 8-2: Whither The Withering Standard Setters?

Chapter 8 Case 8-2

“Whither the Withering Standard Setters?”

1.

There are a number of differences between the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). The IASB consists of 16 members with 3 part time members. The FASB consists of 5 members with no part time members. The members of the IASB board consist of 4 from Asia, 4 from Europe, 4 from North America, 1from Africa, 1 from South America, with 2 from any region in the world. This board is diversified with its members being knowledgeable in the varying fields of accounting such as the academic world, as well as those who utilize, prepare, and audit financial records. The FASB on the other hand requires that its board members be involved as a watchdog for the public. The FASB is a geographically diverse board with members who are knowledgeable in the fields of business, as well as accounting and it’s required reporting. Therefore the FASB board is made up of members from universities, corporations, accounting firms, as well as investors.

There are a number of comparisons between the IASB and the FASB. The IASB is an organization whose design was based upon that of the FASB. Therefore, the process used by both is similar in establishing accounting standards. Those appointed to either board only sit for one term of five years. The meetings of the organizations are made public knowledge and are publically held. Committees and people internal to these organizations decide where to focus the efforts of the respective organizations. Both boards conduct research of subjects presenting the positives and negatives of said, but in the IASB this is accomplished in working groups, whereas in the FASB they utilize employed p...

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...ing the annual budgets of each organization both have huge budgets as seen here from 2012… http://www.ifrs.org/The-organisation/Governance-and-accountability/Annual-reports/Documents/2012-IFRS-Foundation-Annual-Report.pdf and here… http://www.accountingfoundation.org/cs/ContentServer?c=Document_C&pagename=Foundation%2FDocument_C%2FFAFDocumentPage&cid=1176162645907

Therefore, though I do not know if the IASB will maintain without the FASB. However, I do believe that the IASB and FASB will not converge.

Works Cited

Choi, Frederick D. S., and Gary K. Meek. International Accounting. 7th ed. Boston: prentice Hall, 2011.

Financial Accounting Standards Board. FASB. 2012. Web. 29 Mar. 2014.

International Financial Reporting Standards. IFRS. 2012. Web. 29 Mar. 2014.