How the Accounting Standards Dream has Become a Reality
Back in the year 1973, June the professional accountancy bodies in nine countries came together to recognize the speedy globalization of the capital markets internationally. This also included the United States which assisted in the creation of International Accounting Standards Committee (IASC). Their mission was in the formulation and publication in the interest of the public of simple standards that are to be observed while presenting financial statements and audited accounts. The nine professional bodies vowed in writing that in the best of their ability they were to get the then newly launched International Accounting Standards applied in their countries of their origin and also in the promotion of global observance and acceptance.
The IASC had entirely done what was required of them by the year 2000; which was to develop a comprehensive accounting standards body which was approved by the International Federation of Accountants and the International Organization of Securities Commission. The only problem was that out of the nine countries that founded the same, none of them had adopted them yet.
The European Union at the same time was contemplating on developing its own accounting standards set for those companies that are listed in Europe or otherwise adopt the International Accounting Standards. After a couple of deliberations, it chose to adopt the latter. This consequently activated similar adoption decisions in many areas outside the Europe territory including Hong Kong, Australia, New Zealand and South Africa. In fact, many adoptions were done in 2005.
In the year 2001, the old IASC that was poorly researched became restructured to a full time IASB that was better financed under the watch of a new foundation of IFRS. Many new standards have since been produced under the IFRS and those standards inherited from IASC overhauled. There are close to 100 jurisdictions who have adopted the IFRS. To assess the international accounting standards goal, it has narrowed down to three objectives.
a) Developing a central information source to see the progress of various jurisdictions in a bid to adopt one set of the financial reporting standards.
b) Responding to the allegations that several IFRS variations exist globally
c) Identifying how the foundation of IFRS can assist countries to adopt the new standards.