Purdue Global University IFRS Taxonomy and Setting Discussion

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“The IASB has been repeatedly accused of devising accounting standards that pay insufficient attention to the concerns and practices of companies. Some European banks and insurers complain about poor due process by the IASB, and Frits Bolkestein, European commissioner responsible for accounting matters, endorsed their concerns earlier this month.” (Financial Times, 2004, 20)Elaborate on the concerns raised in the preceding quote, and discuss the measures that have been taken by the IASB to alleviate those concerns. 2. The Financial Times, on Tuesday, April 13, 2004, made the following comment in its editorial “Parmalat: Perennial Lessons of European Scandal: Urgent need for better enforcement and investor scepticism”: “After the accounting scandals in the US, there was an unseemly amount of crowing in Europe. As it happens, Parmalat is a much older scandal than Enron or WorldCom. It just took longer to come out at the Italian dairy company. . . . Convergence of standards—in accounting, for instance—will help spread best practice. . . . But we are nowhere near having a world super-regulator. In Italy regulation has been weak because of fragmentation and lack of clout and resources. Attempts to tackle this and to ensure regulators’ independence from political interference should be urgently pursued.” (12)Discuss the lessons referred to above concerning the objectives of the current efforts at setting global standards for accounting and financial reporting.3. Discuss the nature and purpose of IFRS 1 and its predecessor, IAS 4. Discuss the ways in which the terms “harmonization” and “convergence” are similar. How do they differ? Currently, what is the main objective of the IASB?

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