Ethics, Professional Judgment, and Principles-based Decision Making Under IFRS

Steven M. Mintz, DBA, PhD, CPA

For almost 40 years, a movement has been under way to establish one set of international accounting standards for all countries around the world in order to facilitate international trade and investment. Since it is no longer unusual to have foreign companies list their stock on the New York Stock Exchange, one common set of accounting standards should go a long way toward increasing the understandability of international financial reports. Until recently, listing rules required that non-U.S. companies must reconcile their financial statements prepared under home country standards to U.S. Generally Accepted Accounting Principles (GAAP). However, the SEC now permits foreign companies to use International Financial Reporting Standards (IFRS), established by the International Accounting Standards Board (IASB), in lieu of the conversion of foreign financial statements to GAAP.