Question

CPA Interview Question

Get his or her take on the following concept.

Should the United States to IFRS instead of GAAP?

Are there reasons why GAAP is a preferable accounting standard over IFRS?

Answer 1

Answer)

In US most of the companies use GAAP for financial reporting purposes for better understanding of people and when it comes to domestic companies in USA they must use GAAP. However,most companies use both IFRS for reporting in other countries and GAAP based Financial statements for reporting in US.This cost can be reduced if USA uses IFRS instead of GAAP.Henec,In my opinion I would be better if US use IFRS based on cost and acceptance concerns.

The reasons for considering GAAP is it would be high cost for companies functioning only in USA to adopt IFRS and most of the users are unaware of such IFRS standards.