The article I read for response to this question was written by Paul Pacter who was a former member of the International Accounting Standards Board. Mr. Pacter discusses the history and purpose of the convergence of the two boards and the benefits of the convergence, as well as the progress that has been made. He notes that as of 2013 and after 10 years of convergence work, some standards have improved, some are still a work in progress, and there are still three issues outstanding – revenue recognition, leases, and financial instruments (presentation). In the article, it would appear that after much thoughtful consideration and rulings by the SEC, the United States may not be completely ready to converge with the IASB. He states the approach of convergence may have been the most realistic way to initiate the use IFRS in the US, however the only way to actually see this come to a fruition would be by adoption. He says, “Adoption is the only way to achieve a single set of global financial reporting standards – an objective that both the IASB and the FASB have publicly endorsed on many occasions” (Pacter, 2013). Convergence facilitates the adoption, but is only a short-term fix and not a substitution for adoption. The article also includes links to the “Results of Convergence” which highlights the outcome of key decisions made during the project as of the date of this article. The objective of the convergence is to develop a “set of high-quality, understandable, and enforceable International Financial Reporting Standards” that better serve those who make decisions about loans, investments, and stakeholders in the capital markets. The standards’ goal is to develop solutions to “everyday accounting challenges” while allowing entities to speak a similar “language” that extends across country borders. “Investors would be better served if all U.S. public companies used accounting standards promulgated by a single global standard setter as the basis for preparing their financial reports. This would be best accomplished by moving U.S. public companies to an improved version of International Financial Reporting Standards (IFRS), (Pacter, 2013). While I agree with most points made in this article, I am not sure if the United States is prepared to adopt a new framework for reporting. I think as students prepare for their future careers in accounting, continuing to integrate the standards of the IASB into the curriculum would better prepare future accountants for the ever-evolving global business environment. And for those who are already practicing in the field, CPE credits may need to include a minimum number of credits that cover IFRS. If not, the convergence may become a longer process and delays the objectives of the convergence. Although a short read, the article contained important information that provides valuable background which helps me to better understand the purpose of the project and the importance of the convergence. Although the project is not complete, what has been accomplished has improved some standards with partial success and “aligned principals’ even if the words are different” (Pacter, 2013). Hopefully the project will be continued, and the adoption of the standards will be a reality in the United States.
Summarize 150 words and reaction 150 words.