Accepting IFRS will offer comparability, improved audit effectiveness, minimized information misconstruction, and expenditure savings as increasing financial transactions become universal. The adoption of IFRS as well provides a remarkable chance in the accounting field. Shifting to a totally new reporting framework eventually may facilitate corporations to rationalize accounting practices and minimize compliance fees. Although there are disparities between the two accounting guidelines, the general standards, conceptual structure, and accounting outcomes between them are often similar, for the majority of accounting operations.
Conversion to the single IFRS system can as well bring several disadvantages. The United States economy is the biggest internationally, and the impact of employing IFRS on such a huge economy is not clear. IFRS has not been tried in any single economy as big as the United States. Conversely, the country’s GAAP has been developing with a number of amendments and has been reliable, particularly in detecting the scams, for instance, in Enron International. Implementation of IFRS can as well bring some challenges. Although the country has successful enforcement, it is very tricky to put into operation strict implementation among those member nations because of the disparities in monetary and political system among the accepting countries and their financial reporting performances.
Suggestions by the Securities and Exchange Commission (SEC) permit particular United States companies to apply either IFRS or GAAP and pressurizing owners and institutions to learn and employ new standards at the same time would be unfair. The SEC application may as well incorrectly suppose that companies will willingly devote to considerable IFRS development expenditures in the absence of a commanded time limit. Another possible disadvantage is that IFRS may not advance global comparability if companies and controllers employ principles-oriented practices in a different way. There is no particular enforcement organization to ascertain that IFRS are interpreted and used in a standardized approach. The United States should participate and play a significant part in guiding the world in accepting and using international standards because these standards will impact the country in the long run.