Article Writing Homework Help. Need an research paper on the european union necessity to adopt international accounting standards. Needs to be 8 pages. Please no plagiarism.
Need an research paper on the european union necessity to adopt international accounting standards. Needs to be 8 pages. Please no plagiarism. The events surrounding the Enron scandal in the US have triggered the European countries to adopt a more rationalized accounting standard that would be applied in the whole of Europe from 2005.
The Enron scandal was directly linked to the failure of the US generally accepted accounting principles (GAAP) on accounting (Prentice, Robert, 2002. Choi and Fisch, 2003) that caused the European Union (EU) members to lose their trust on said accounting rules and conventions. Said members of the EU have even persuaded the US to change its GAAP with the IAS due to the ineffectiveness of the former to address financial reporting problems as experienced in the case of Enron. It was as on February 21, 2002, that Fritz Bolkestein, European internal market commissioner has urged the US Securities and Exchange Commission to replace US GAAP with the IAS. Mr. Bolkestein was quoted to have referred to the ‘cookery book’ approach of US GAAP that must be replaced with the more ‘substance over form’ approach of the IAS (Deloitte Touche Tohmatsu, 2008). The meat of the EC Commissioner’s objection to the US GAAP was the fact it has rigid rules and that “one just have to tick the boxes and one comes come with the answers.” The emphasis was more on the rules and the form and not on the substance. The EU’s lack of trust for the US GAAP was more evident by the fact Mr. Bolkestein was even prepared to ask the SEC to allow listed US-listed European companies to submit IAS financial statements without reconciliation to US GAAP (Deloitte Touche Tohmatsu, 2008).
The attitude of the EU to what happened to the Enron scandal and subsequent to the declaration made by European Commissioner Bolkestein have triggered the adoption of the IAS into the EU. The seriousness of the attitude materialized after the EU has urged the SEC to adopt IAS in February 2002 as subsequent even which resulted in an overwhelming adoption of the IAS by the European Parliament in the following month, on March 13, 2002. .