Convergence of IFRS and U.S. GAAP: Implications on the public accounting profession

The buzz in today’s accounting world is about the convergence of the United States Generally Accepted Accounting Principles (U.S. GAAP) with International Financial Reporting Standards (IFRS). In the past, all companies on the U.S. securities exchange were required to prepare financial statements according to U.S. GAAP. If they were a foreign company, they were required to prepare a reconciliation of their statements to U.S. GAAP. However, this has prevented some markets from realizing their full potential because of the seemingly inexhaustible rules and regulations that our country requires. In response, a proposal in 2005 suggested that the United States start integrating international standards into their system since the world is becoming increasingly more global (PwC: IFRS, 2007). This proposal led to an ongoing convergence process that is currently evolving and being implemented