RELATIONSHIP BETWEEN IASB AND FASB

In 1973, the private sector International Accounting Standards Board (IASB) was formed. The IASB is a natural extension of a global market that has been evolving over the last three decades. The IASB formulates and publishes accounting standards to be observed when presenting financial statements and promote their global acceptance. As an overarching mission, the IASB works to improve and harmonize accounting standards, regulations, and procedures as it relates to financial statements. IASB standards provide a reference model and set of examples for financial reporting in developing countries. The IASB has no authority with the Financial Accounting Standards Board (FASB) or the Securities and Exchange Commission (SEC) in the United States at this time.

Even though the FASB and SEC are not members of the ISAB, the SEC has ruled formally that public companies that have adopted the IASB standards can list their securities on the United States stock exchanges (Schroeder, Clark, & Cathey,Chapter 1, 2011). The International Accounting Standards Board is partnering with national standard setters to accelerate the convergence between national and