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International Accounting Principles

Accounting reporting criteria
International accounting practices need some form of guidance in order to keep companies, investors and employees accountable. International accounting practices ensure that the proper financial records will be kept in order to safe guard against corrupt practices that lead to scandals and misuse of money. In 1973, the Board of the International Accounting Standards Committee was founded as a result of an agreement by accountancy bodies (International Accounting Standards Board, 2008). “In April of 2001, the International Accounting Standards Board (IASB) assumed accounting standard-setting responsibilities from its predecessor body, the International Accounting Standards Committee” (International Accounting Standards Board, 2008). Currently, Over 100 countries participate in the International Accounting Standards Board (International Accounting Standards Board, 2008). Even though no two countries have exactly the same accounting rules, many similarities exist among the various accounting systems used around the world. Furthermore, geographic, political, and social forces tend to promote similar views within selected sets of countries (Edmonds, Edmonds, & McNair, 2006, p. 125).
“IASB tries to improve the uniformity of accounting practices around the world by recommending the appropriate accounting treatment for various business events. However, the IASB has no enforcement power, so its pronouncements are simply recommendations, not requirements” (Edmonds, Edmonds, & McNair, 2006, p. 125). Like GAAP in the United States, the international business market needs a way of having a guideline on how corporations proceed with accounting methods for accuracy.   Establishing IASB methods provide companies financial creditability to the shareholders, employees, and investors (Edmonds, Edmonds, & McNair, 2006, p. 125). Although the IASB is not as regulated as the GAAP in the United States, the organization does provide companies with an...