Articles BRIDGING THE GAP: EVALUATING THE VIABILITY OF THE UNITED STATES' SHIFT FROM GAAP TO IFRS THROUGH ECONOMIC, INSTITUTIONAL, AND TECHNOLOGICAL LENSES
Year: 2025
Type: article
Abstract: The question of whether the United States should adopt the IFRS (International Financial Reporting Standards) has recently gained global attention due to the increasingly interconnected nature of financial markets. The US currently continues to rely on its domestic GAAP (Generally Accepted Accounting Principles) despite 70% of countries having implemented IFRS. This paper will thoroughly evaluate the viability of the full adoption of IFRS by the U.S. through three different lenses: (i) economic, (ii) institutional, and (iii) technological. In terms of economics, improved investment transparency and comparability can occur following the adoption; however, it may also offer uneven benefits across firms of different sizes. Institutionally, transition may be both politically and logistically challenging due to GAAP implementation in the U.S. legal, regulatory, and educational systems. And technologically, IFRS’s principles-based nature complicates automation and requires substantial reprogramming and retraining efforts. After analysis of the question through these lenses, it can be concluded that while IFRS promotes global alignment, a full transition in the U.S. is currently impractical. Nevertheless, a hybrid approach or a gradual transition may offer a more effective path in the long run.
Author: Calvin Abdullah
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7079537383
FWCI:
Cites:
Cited by:
Related to: