Article 1: GAAP convergence or convergence Gap: unfolding ten years of accounting change

Baudot (2014) explores new knowledge in accounting, namely in the Financial Accounting
Standards Board (FASB): Generally Accepted Accounting Practices (GAAP) and the
International Accounting Standards Board (IASB) Conceptual Framework, where there have
been attempts of developing a global set of accounting standards. The research aims at
explaining the term convergence in accounting standards. It aims to use empirical and
theoretical clearness. The research area focuses on 23 documents released from the project,
between 2002 and 2011, which a comparison was made from the previous FASB-IASB
accounting standards. The project endeavors to produce a single set of accounting standards
that may be used globally, hence the purpose of the two most prevalent accounting boards,
attempting to converge their two sets of accounting standards --- GAAP and International
Financial Reporting Standard (IFRS). There were three specific regimes that Baudot used as
criterion to categorize the changes made between the two sets of accounting standards. The
regimes were as follows: direct emulation; reducing of differences; and progressively
redesigning the standard. It further details the activities under each regime and results each of
its effect. Also, the research examines the cooperation between the two conceptual-framework
bodies, FASB and IASB, in the span of the ten years, in progressing the project.
Sampling was conducted of 125 present and past employees. Data collection occurred only
limited to the ten-year duration. The research design of the study was a longitudinal study,
between 2002 and 2011, focusing on 23 prominent projects from the FASB-IASB initiative.
Case studies were undertaken throughout the course of the research, comparatively analyzing
convergence projects in different phases. Findings revealed that there were changes to the
accounting standards as per the regimes. Overall the project was a step forward in the
continuing process of the globalization of accounting. Through competition and cooperation
FASB and IASB are still independent bodies.
Article 2:
Gray, et al. (2009) focuses this research article on the examination of the differences between
IFRS and the US GAAP --- the existing gap, namely between the US and the European
economies. The foci of the research are on net income and shareholders’ equity, how the two
components are affected when translating monetary value from one region to the other. This
lead to the development of two hypotheses: “H1a” and “H1b”. The former examines the former
accounting standard of Europe, which is GAAP and compares it with the US GAAP. The
examination takes place in the span of four years, from 2001 to 2004, examining the significant
of the difference in income. Likewise, was the case for the latter hypothesis, however equity
was examined, instead of income. Gray et al. further develops two other hypotheses (H2a &
H2b) similar to the aforementioned; however, this time it compares IFRS to GAAP.
Sampling comprised of 97 out of 134 European companies, filing IFRS-based Financial
reports, from the year ended 2005. Population extracted from the websites of the NYSE,
NASDAQ and the SEC.
Various data collected for all hypotheses purposes, by hand, between the years of 2001 and
2006. These data were accessed online through websites like EDGAR.
Methodology of experiments. Formulae were used as a way to gauge statistical results.
Overall, the hypotheses were valid and there were significant differences for both equity and
income in both pair of reporting standards comparison. Differences were higher for European
companies reporting under the IFRS.