Accounting Profession Essay

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Recommended: Benefits of global harmonization of accounting standards

The accounting profession, along with its standards and regulatory sources, have changed dramatically in recent years. The accounting profession and its standards once consisted of standardized financial reporting compliance; however, it has now evolved into a specialized profession influenced by its constantly evolving standards resulting in accounting and legal technicalities. Many factors constituted the change, in addition to factors that constituted the need for its change; for example, corporate scandals and a global set of accounting standards respectively. The latter enticed its global trend for accounting harmonization among various private and governmental sectors that work cohesively to obtain its purpose. The various regulatory …show more content…

The FASB and the SEC, historically, worked exclusively on developing and implementing United States Generally Accepted Accounting Principles (US GAAP) for public and private companies and not-for-profit organizations. The SEC was formed through the 1934 Securities Exchange Act due to the 1929 stock market crash, which instilled it as a regulatory agency. The SEC previously set US GAAP accounting standards until it transferred authority to the FASB, but maintains legislative jurisdiction and is a key component in overseeing the FASB accounting standards. The SEC’s purpose is to ensure regulatory compliance of financial accounting reporting by protecting US and foreign investors of securities sold in the US (Palmon, Peytcheva & Yezegel, …show more content…

Cash accounting is straight-forward, recognizing revenue and expenses when cash is received; however, entities that apply accrual accounting fall into the discrepancy in the manner revenue and expenses are recognized based upon the entity’s binding standard. US GAAP treats revenue recognition based upon industry specific guidelines of which IFRS lacks. Both standards have yet to be converged and its future plans are set to be addressed in 2018. However, as an initial movement, both organizations have established revenue recognition guidelines for revenue from contract with customers through IFRS 15 by applying a five-step

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