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ABSTRACT
This paper offers a progress report on the convergence of IFRS and U.S. GAAP and its curriculum impact in higher education. In an earlier (2009) published paper, the authors explored faculty perceptions regarding the feasibility of global standards, difficulties in training for teaching IFRS, the practicality of the roadmap for the convergence, and benefits gained. Information on accounting chairs '/deans' perceptions regarding this convergence was obtained from thirty-seven top ranked AACSB-accredited accounting programs in the U.S. to validate earlier findings. In this paper, the current status of the convergence, reports of studies from around the world, and other research performed on curriculum impact are presented.
Keywords: International financial reporting standards (IFRS), Curriculum impact of adoption of IFRS, Human capital impact on accounting profession, Global capitalization of markets, Harmonization of accounting standards
INTRODUCTION
In a 1991 article, R.K. Goeltz opined that harmonization of international accounting standards was impractical and not necessarily proven to be valuable. Within twenty years, the world has come to a point where more than 100 countries have adopted IFRS and more, including the United States, will most likely do so before the end of the next decade. The main benefits expected from having one set of accounting standards are better comparability of financial statements of companies from different nation states, facilitation of global trade and world capital markets, and a lower cost of capital (Bolt-Lee & Smith, 2009). It has also been argued that the principles-based approach followed by IFRS may improve quality of financial reporting as earnings management may be reduced. However, others have disputed this claim and found no such significant improvement in earnings quality experienced by countries adopting IFRS (Jeanjean & Stolowy, 2008). Among the negative effects, researchers point out the cost of transitioning to IFRS to be the major impact. In countries with established high quality and stringent accounting standards, such as the U.S., financial reporting improvements from adopting IFRS are anticipated to be minor as a whole (Hail, Leuz, & Wysocki, 2009). These authors even suggest creation of a competing U.S. GAAP-based set of global standards as an alternative to IFRS.
Regardless of the aforementioned varying opinions and study results, convergence of U.S.
GAAP with IFRS is now more of a reality rather than...