The International Financial Reporting Standards
The International Financial Reporting Standards (IFRS) are a set of guidelines and rules that guide accounting and financial professionals all over the world in preparing and reporting the financial information of business entities (AICPA, 2008). The IFRS set of guidelines were adopted by the International Accounting Standards Board (IASB) to guide the board in the regulation of the accounting professional industry. The IASB continually seeks to provide better quality accounting information for all its users; therefore, the IFRS were developed to address the growing demand for this quality information. The development and acceptance of the IFRS as internationally accepted guidelines is a process that started more than a decade ago, with the first introduction of the Financial Accounting Standards Board (FASB) to produce the Generally Accepted Accounting Principles (GAAP).
The setting of US accounting standards by the FASB needed to be universalized; therefore, the IASB was formed in 2001 to set internationally accepted accounting standards. This led to the development of the IFRS, which are standards that tend to converge on a solution for the international body of accounting. The formation of the IFRS included an adoption of the International Accounting Standards (IAS) that was being used by the IASC before the introduction of the IASB. The current composition of the IASB is still overseen by the IFRS foundation and a number of members drawn from the international body of accountants. ...
The structure of the IFRS is determined by the bodies that are mandated to determine their validity and application. As already stated, the IFRS are determined by the IASB, but the specific treatments contain therein comprise of four major factors, the IFRS, the International Accounting Standards (IAS), the Standing Interpretations Committee (SIC), and the conceptual framework (PWC, 2011). The construction of the IFRS is mainly based on the requirements of these bodies of rules, since the standards were formed as a means of unifying accounting reporting practice in the international community. As already stated, the IFRS were formed as a prelude to the IASC, and the IASC members are still considered members of the IFRS supervisory committee. The IASC board that was replaced by the IFRS was mainly composed of five member groups; the IASC board, the consultative group that represented a range of financial partners, the SIC, an advisory council, and steering committees that oversaw individual projects (PWC, 2011). This means that the IASC board was mainly a structure rather than a committee that oversaw the accounting profession. In 1997, the IASC was restructured to include a more internalized accounting field and perform its role more effectively. The restructuring of the IASC bore the IASB, which took effect in 2001 (PWC, 2011). The new accounting body, IASB, was organized under a new foundation called the IFRS foundation that sought to make accounting practices concerning financial reporting more effective (IASPLUS, 2011). The components of the new structure include the IASB, which has the full mandate of establishing the IFRS and the IFRS foundation to oversee the work of