Accounting Reporting Criteria Paper
All businesses must conform to an accounting reporting criteria no matter where they are in the world. In the U.S., companies follow the Financial Accounting Standards Board. Outside of the U.S. companies follow the International Accounting Standards Board. Both of these boards are similar and different in many ways. Many companies are now global and the difficult task they currently face is translating the growing criteria. Ford and Nissan are two companies currently facing these problems. This paper will discuss these two companies and outline their accounting criteria.
In the United States companies are required to follow Generally Accepted Accounting Principles (GAAP), which are developed by the Financial Accounting Standards Board in conjunction with the Securities and Exchange Commission, which is a government agency that oversees financial reporting by public companies. On the other hand, companies in many foreign companies follow the accounting rules known as International Financial Reporting Standards (IFRS), which are developed by the London based International Accounting Standards Board.
However, a recent decision by the Securities and Exchange Commission (SEC) may change this. The commission has voted to allow American multi-national companies to follow International Financial Reporting Standards beginning on a voluntary basis in 2010. The SEC will later decide if all American companies are required to follow the international standards beginning in 2014. According to an article appearing on the website, Economist.com, the international standards are less complicated than GAAP, and following the international standards will relieve multi-national companies of having to do accounting under both GAAP and international standards, which is very costly. International accounting standards tend to be more principles-based than GAAP, which means that accountants have more...