The process of convergence between IFRS and US GAAP : current status and open issues

This paper provides an updated picture of the convergence process between International Financial Reporting Standards (IFRS) and United States Generally Accepted Accounting Principles (US GAAP), with IFRS clearly emerging as a global financial reporting benchmark. Since markets became increasingly global, the comparability of financial statements is required to enable better corporate communication and transparency to the advantage of all stakeholders. This study is aimed at evaluating the main benefits but also some significant issues arising from the adoption of a single set of accounting standards. The IFRS adoption by the United States is also discussed. The main examples of theoretical and empirical literature for and against IFRS implementation are analyzed. The study’s implications are to emphasize the practical obstacles to resolving the issues of financial communication through a uniform set of standards, by highlighting the importance of taking into account other dynamics in improving the corporate disclosure domestically and globally.