When you consider what has transpired over the past year with Enron, WorldCom, Adelphia, and ultimately the passage of Sarbanes-Oxley, the profession has inarguably its share of problems.
But it could be worse. Consider this scenario: In the quest to achieve a convergence on global accounting standards, the profession enlists the help of the United Nations.
If that were the case and the U.N. accepted this assignment, I would estimate that we’d reach a global consensus on standards just as the first Mars colony was being settled.
I’m convinced that in former lives most U.N. officials and diplomats worked as cab drivers in Manhattan. I say this because history has shown that most of them couldn’t determine the shortest route to cross the street, let alone reach an accord between two or more very ticked-off countries.
But fortunately, the profession doesn’t have to worry about international peacekeepers, weapons inspectors (unless cell phones and calculators are suddenly declared contraband), or hotly debated ethnic borders. In this arena, they just have to figure out how to dovetail U.S. GAAP with international standards and keep everyone happy. In all honesty, that may turn out to be nearly as difficult as hammering out a peace treaty in the Middle East.
In a preliminary accord of sorts, the Financial Accounting Standards Board, and its London-based counterpart, the International Accounting Standards Board, agreed a collaborative project to address the convergence of global accounting standards.
After meeting at the FASB’s headquarters last week, members of both bodies forged an agreement to team on a "short-term" convergence project.
The staffs of both boards intend to work in concert with the Securities and Exchange Commission to develop the breadth of the joint effort which, in essence, will attempt to whittle away some key differences between
U.S. GAAP and international accounting standards.
The FASB/IASB project would in theory, address roughly 12 areas where both factions have agreed there is some "synergy."
And in contrast to past FASB projects, it’s moving fairly quickly. At their October meeting, FASB members are scheduled to officially weigh in on the project, which will formally designate members of both groups to the matter.
To successfully navigate through global markets everyone — and not the least of whom are accountants — must be on the same page.
However, as any diplomat will readily tell you, change is hard. In this case it’s also very necessary.
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