Research Poster Presentations
P OS T E R
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POSTER
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What is IFRS and How Does it Compare to US GAAP? Kelly P. Zaia
Fraud and Its Effects on the Accounting Profession Adejoke Adegoke
Faculty Mentor: Professor Daniel Gagliardi
Faculty Mentor: Professor Patricia Galletta
Department of Business
Department of Business
Generally Accepted Accounting Principles (GAAP) is the financial reporting standard used in the United States (US) today.The Financial Accounting Standards Board (FASB), with the assistance of the American Institute of Certified Public Accountants (AICPA), determines the rules of GAAP, subject to oversight by the Securities and Exchange Commission (SEC).The financial statements prepared by a business in the US are the Balance Sheet, Income Statement, Statement of Changes in Stockholder’s Equity, and the Statement of Cash Flows.The basic objective of financial reporting is to provide information that is useful and accurate to potential investors, creditors, and business owners in order for them to make sound financial and long term decisions.The AICPA’s recognition of the London based International Accounting Standards Board (IASB) has become the game changer to GAAP. IASB developed International Financial Reporting Standards (IFRS) and the SEC issued a statement in support of IFRS. IFRS is becoming the global standard for financial reporting, and is currently the accounting standard used by 120 nations, including the European Union. While the SEC has not made a decision about adoption or convergence to IFRS, it is estimated full IFRS will be adopted in 2015.This paper will include a brief history of GAAP and its key components, give an explanation of IFRS, compare GAAP to IFRS, outline the SEC’s plan, and challenges the US faces if adoption or convergence does occur.
McKesson & Robbins Inc., Enron, Arthur Andersen LLP, and Lehman Brothers Holdings Inc., are a few companies that have been involved in financial scandals.The McKesson & Robbins Inc. scandal that occurred in 1938 is considered one of the most important financial scandals of the 20th century. Twenty percent of McKesson & Robbins’ assets were comprised of made up inventories and accounts receivable.This case was so influential that it led indirectly to the enactment of the Generally Accepted Auditing Standards (GAAS). Enron lied about its profits and was involved in many shady activities, such as hiding its debts in order to keep them from showing up in company accounts. Arthur Andersen LLP was an 89 year old accounting firm that was convicted for destroying important documents that were related to the Enron scandal. Lehman Brothers used an accounting trick in order to make its finances look strong, when in fact they were really shaky. Many of the fraudulent activities that were a part of these scandals ultimately affected the economy, destroyed many lives, and led to many changes in the field of accounting.This paper will focus on the rules and regulations that were created and the higher standards of accountability that were set in auditing after the aforementioned scandals occurred, in order to prevent future ones. My research findings will explain the specific effects of each one of the scandals, and the important role accountants must now take in order to prevent fraud and maintain the trust the public should have in the quality of their work.
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