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International Accounting Standards

             A look at how accounting standards are being adopted by international companies.
             The Federal Accounting Standards Board (FASB) has control over how business is conducted here in the United States, but the need for international accounting standards is critical in today's global economy. In 1973, Sir Henry Benson realized this and formed the International Accounting Standards Committee(IASC). The fundamental aim of the IASC has been, " to formulate and publish, in the public interest, accounting standards to be observed in the presentation of financial statements and to promote their worldwide acceptance and observance." (Management Accounting, p30). .
             The IASC has expanded rapidly. In 1973 there were nine committee members; Australia, Canada, France, Japan, Mexico, The Netherlands, United Kingdom, Ireland, United States, and West Germany. The shareholders and main users of financial institutions, rather than the members of the actual institutions, initially dominated the IASC. The membership of the IASC has expanded since 1973 with 128 members in 91 countries. "The board members have also changed along with the structure of the world economy to reflect African, Central American, and Asian influence" (Management Accounting, 30). .
             Now that a history on FASB and IASC has been examined, one might ask the importance of these organizations as well as their role in the Accounting profession. FASB currently maintains its hold on the accounting profession through the power it has been given by the Securities Exchange Commission (SEC). Under the Securities Exchange Act of 1934, all publicly held companies are required to follow the SEC's guidelines for reporting financial accounting standards. The SEC has since given this sector of its power to the FASB. The seen reason for this, is to allow the practice of accounting to remain in the private sector and its duty being served, to produce public financial statements and reports.

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