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The Convergence of U.

S GAAP with IFRS: A Comparative Analysis of Commented [LR1]: Best practice in APA is a running
Principles-based and Rules-based Accounting Standards.

University of Belize

ENGL 31553- 1

Article Review

Instructor: Mrs. Lisa Ramirez

October 10th, 2017

Dr. Guillaumes and Dr. Pierres article, A comparative Analysis of Principles-

based and Rules-based Accounting Standards, argues that in order to have one set of

accounting standards U.S GAAP and IFRS should converge. They support their

argument by using an explanatory qualitative research method that focuses on

providing, accountants or any individuals using accounting standards, the literature

which covers the rule-based (GAAP) and principles-based (IFRS) accounting standards.

Outlining what the converging of the two standards does to the accounting systems and

individuals pursuing careers with accounting background is of utmost importance;

however, not providing input on the cost of this major change does not provide a

complete outlook on the merging of these standards. Commented [LR2]: Good thesis

U.S GAAP and IFRS are the only two sets of accounting standards. U.S GAAP,

rules-based standards, provided solutions for all or most application issues in

accounting; however, IFRS, principles-based standards, is a set of guidelines that allows

greater latitude of interpretations; these interpretations come from accountants,

auditors, leaders, and any other individuals that use the accounting standards. The

problem aroseises when the scandal at Enron and WorldCom ignited the debate Commented [LR3]: Past event

between principles-based versus rules-based standards in accounting. The examination

of information regarding the transition towards one single set of accounting standards

led to the development of two alternate conclusions. Although research allows for the

belief that convergence with IFRS is imminent, the fact remains that FASB and IASB

will need to work diligently in order to resolve the differences between the two sets of

accounting standards.
Researching these two set of accounting standards is tedious because of the

various differences between each other. Realizing that in order for this article to be fully

subjective and informative, Dr. Guillaume and Dr. Pierre did not rely on their

experience and knowledge alone but highlighted the input of research made from a

number of other experts. Allowing the input from other related experts give readers an

idea of how other accounting experts view the change that will occur in the future of the

accounting field. Dr. Guillaume and Dr. Pierre gave reasons as to why the merging of Commented [LR4]: Ok.

these two accounting standards was developed. Justifying the reasons and giving

sufficient examples of the decision made help readers mind to look into more than one

perspective of the matter. Dr. Guillaume and Dr. Pierre used the scandal of Enron and

WorldCom, two well-known companies, to highlight the cause of developing this Commented [LR5]: Impetus? Need?

convergence. Both authors could have used companies that are not well known to get

their points across; however, they used well established companies to show that having

two accounting standards is a serious issue. Dr. Guillaume and Dr. Pierre made the

points of their interest very clear using direct research and evidence. Commented [LR6]: Direct research and evidence is an
expectation so this is somewhat vague. Specify a little
Solutions to this argument are not an overnight design or procedure; this takes further.

input from companies all over the world who utilize either of the accounting standards;

however, acknowledging that the accounting system needs to change so that the

upcoming and veterans in the accounting field can trust any document that is

formulated under the standards. SEC (Security and Exchange Commission) requested Commented [LR7]: This seems incomplete. The however
and the verbal at the start subordinate the idea.
that because of the debate between the convergences of the two standards, companies

using U.S GAAP must now consider merging with or adapting to the principle-based

standards (IFRS). With this change comes the key issues of consistency and reliability of

the financial reports. Consistency and Reliability of financial reports is embedded into
the minds of any accounting student or worker; therefore; this should be the forefront of

the various reasons as to why the standards should change. Dr. Guillaume and Dr.

Pierre did not give any insight as to what are the negative impacts this change will have

on the accounting field and most importantly the companies who have been using either

of these standards for numerous years. Will companies even want to change their whole Commented [LR8]: Good.

accounting in the business? What if a particular company believes that one out of the

two set of accounting standards provide the most substantial, efficient, and consistent

financial reports. Questions such as those should have been included into the article

because in the end its the same organizations that will utilize the change that will be

made. If the two set of standards are merging or just adapting to one another, it will

formulate a change and a reaction out of its users. The solution to this problem is not

insight but working towards it is a great first step. Commented [LR9]: Now you need a conclusion.
Elaborate on what is of value in the article to professionals
in the field.