Question

Answer each of the following related to international accounting standards.

a. Explain how the purposes and principles of internal controls are different between accounting systems reporting under IFRS versus U.S. GAAP.

Short answer

Answer

The purposes and principles of internal control systems are essentially no different from accounting frameworks reporting under IFRS and U.S. GAAP. Although social and different contrasts exist and should be perceived while laying out internal controls, the basic objectives and principles don't change.

Step-by-step solution

Step-by-Step SolutionStep 1: Introduction to topic

Generally accepted accounting principles (GAAP): GAAP refers to a typical arrangement of accounting principles and systemsgiven by the Financial Accounting Standards Board (FASB). Public organizations in the U.S. should follow GAAP when their accountants incorporate their financial statements.

The Purpose and principles of internal control system under IFRS and U.S. GAAP:

• The fundamental Purpose behind the internal control framework under IFRS and U.S. GAAP is to deliver top-quality financial reporting.

• The staff of the internal control framework should know the distinctions of accounting standards under IFRS and U.S GAAP.

• The organizations changing over policies from U.S. GAAP to IFRS ought to consider risks like misstatement of financial information and fraud.