The institutional and the cultural jobs are the chief issues for the acceptance of IFRS into the US. First, the US has the universes largest capital market. The manner of puting criterions has a long history ( Roberts et al, 2008 ) . The different of national establishments arouse the jobs of the IFRS execution in different legal powers, there are no sufficient enforcement mechanisms in the US, professional judgement is considered as the chiefly cultural different between the two. And the different political, legal educational corporate administration systems would take to the elephantine alteration even the infrastructural system in the US. Besides, the International Accounting Standards Board does non hold authorization to implement its criterions ( Gibson, 2012 ) . One of the most dramatic different of these two accounting constructions is the puting attack ; U.S GAAP is utilizing the rule-based attack while IFRS use principle-based measuring. Under these differences, the US GAAP takes more concern about the literature instead than IFRS, which is sing the facts pattern ( Forgeas, 2008 ) . Furthermore, harmonizing to the different scene attacks, there are assorted statements resulted by these two accounting system. For those back uping the rules-based criterions could profit from a clear statement for regulators and for those capable to ordinance. With the item ordinances, rules-based criterions would be able to cover with the complex concern jobs particularly under the emerging fortunes. And, although the principles-based criterions would let the ‘bigger image ‘ of representation, the groundss have shown the ruled-based criterions could be able to show a faithful representation of economic world in a consistent mode ( Kivi et al, 2004 ) . For the other facet, since the rules-based criterions are better in work outing the jobs in a peculiar state of affairs, sometimes, it is hard to acquire understanding from it. That could ensue a series incommodiousnesss. The principles-based criterions are more antiphonal to alterations in concern patterns and will better transparence of coverage as it gives the flexibleness for the users. Meanwhile, the US GAAP besides has its ain advantages, such like the transparence with distinct regulations and application counsel. The US believes the alone public enforcement of the high quality criterions consequence in the item regulations and the institutional substructure ( Yoon, 2009 ) . Therefore, the differences are non merely impact the fiscal coverage but besides the companies ‘ activities. In this instance, the procedures of passage the IFRS to the US would take a long clip and it would be complicated.
In fact, there are many groundss show that US is traveling toward the acceptance of IFRS easy particularly after the Enron. The US is moving to forestall the same jobs by seting the accounting system, such as all the fiscal studies of cross-listed companies on the stock market in the US have been allowed to utilize IFRS since 2007 ( Zeff, 2008 ) . In this instance, the statements contain both positive and negative positions of the acceptance of IFRS in the US. No uncertainty, the acceptance of IFRS would increase the comparison and transparence of fiscal information between the transnational companies in the US and the investors can entree the foreign capital markets easier and assist the growing of economic system. The IFRS can besides assist heightening the efficiency of the usage of resource. The judgements of IFRS can expeditiously forestall the maltreatments that occurred under the US GAAP. Besides, it can better the liquidness of capital markets and cut down companies ‘ costs of capital by supplying better information for the investors on the corporate public presentation.
However, the SEC staff wrote that IFRS were a set of high-quality criterions, but the spread between the IFRS and US GAAP should be concerned as it has a batch of decisive influences. Such as, the betterment of the comparison benefits of the accounting studies is based on the similar accounting conditions, in other words, accounting criterions are one of the factors have the impacts on the companies ‘ fiscal coverage inducements, if other different factors across states and industries are remaining still, the fiscal coverage and the patterns will non acquire much benefits as the chances. For illustration, Harmonizing to the Hail et Al ( 2010 ) , the significant impact on the coverage quality of the U.S houses that makes the transition to IFRS more impossible. Since, there are no amalgamate groundss to turn out which set of the accounting criterions is better for the US. While, the companies are able to describe their accounting information in a manner that is formed non merely in conformity with the US ‘ accounting rules but besides the strength of the state ‘s legal establishment and enforcement attempts. The companies are apt to run into the demand of the investors with a high quality study so that it can heighten the ability of accessing the outside financess in the capital markets, merchandise competition and administration patterns. These elements of the accounting study have been good considered under the current accounting system in the US. Unless the elements mentioned above are altering, the current accounting criterions in the U.S would non hold a important betterment by utilizing the IFRS. Conversely, the alterations would likely take the state into an uncertainness state of affairs and do it even worse.
Furthermore, since the IFRS adopting states are assorted in the applications of IRRS and directors would of course mention to the local GAAP while doing concern determinations. Besides, U.S and international criterions regulators are doing the attempts to meet the IFRS and the U.S GAAP. These two accounting criterions tend to be harmonized and more modest. Therefore, the transition seems unwanted and it would convey a batch of uncertainness to industries and companies in the U.S.
Obviously, the transition from the beginning accounting criterions to the IFRS will be a batch from the companies, investors, hearers and other relevant from re-training the employees, repositing the whole accounting systems and during the passage, hearers and comptrollers need to do the criterions amendment in order to compare the differences between the fiscal studies under the U.S GAAP and the IFRS application. There is study grounds from the 2005 compulsory passage to IFRS in the EU and the passage costs for appraisal would at least be 8 billion dollars for the full U.S economic system ( De George et al, 2013 ) . Although the switch could convey a long term benefit to the U.S, necessarily many of the U.S GAAP hearers and comptrollers will lose occupations, while, to those companies could non afford the extremely cost, it may ruin the companies and this issue could be significant.
In contrast, the transnational companies and the fiscal markets increase the possibility to unite the accounting criterions, in the U.S, particularly for those big and cross-listed companies on the US stock market which have the capital advantage will be able to obtain the long term benefits from the passage to IFRS. It is predictable that the transition to IFRS will diminish the cost of capital by accomplishing comparison through the principles-based criterions ( Selling, 2008 ) . Using the IFRS can salvage a batch from interpreting the accounting information to the local 1. Because of the planetary influencing power of IFRS is increasing, these companies in the U.S will acquire more and more benefits instead than utilizing the individual set of U.S GAAP. Hence, the acceptance of IFRS in the US could profit the transnational companies and the big companies with a long term cost economy and aid maintaining up with the globalisation in the accounting country.
As Niskanen ( 2010 ) stated, the current fiscal accounting criterion in the U.S is non considered as a perfect usher for the hearers and investors. He recommended the accounting criterions puting should non be set by the FASB and approved by the S.E.C as he believes that assorted houses and industries do non acquire the most advantages from one set of accounting criterions. Significantly, the accounting criterions board, Congress and the S.E.C do non hold better information than other establishments about puting accounting criterions. Meanwhile, the S.E.C has the specific high quality in showing the current political demands balance but it does non hold the advantages to O.K. the amendments from the FASB. At present, the U.S is analyzing the comparative value of rules-based and principle-based accounting. Therefore, it would do an consequence on the S.E.C on the criterions puting attack in some ways. Alternatively, S.E.C allowed the objectives-based attack that creates criterions in the footing of the scene ends in order to make more reasonable and enlightening fiscal statements. However, they are non able to clear up what precisely the related constructs ( Niskanen, 2010 ) . Apart from that, the current U.S accounting criterions are going more and more unusual composite and vulnerable to subjective reading due to the slowly updates of the new type fiscal minutess and conditions of FASB. It is excessively weak to function those controversial accounting philosophies. In this instance, US investors expect that the state will finally follow the IFRS after the analysis of the study from the ACCA ( the Association of Chartered Certified Accountants ) . Harmonizing to this study ( ACCA, 2012 ) , there are 57 per centum of investors believe the SEC will necessitate the acceptance of IFRS because they believe it would finally convey a batch of benefits to the US economic system. As the ordinance and the harmonisation is truly of import to the accounting criterions. The better apprehension of the planetary criterions can increase the confidence to both companies and investors ( Cohn, 2012 ) . Although the transition of two accounting criterions has been doing attempt for a long clip, the inside informations differences lead the procedures more complex. The US GAAP has proved them with a good quality. Therefore, whether the advantages of the US GAAP could be maintained during the shift procedures would be the biggest challenges overall.