Page 41 - Azerbaijan State University of Economics

N.I.Koval: The history of the development of the global accounting system and international
standarts

The 21st century also saw the passage of the Dodd-Frank Act after the
recession of 2008. The act contains 16 major areas of reform, including creation of
the Financial Stability Oversight Council and the Volcker Rule that restricts banks
from owning, investing, or sponsoring hedge funds, private equity funds, or any
other type of proprietary trading operations that result in their own profit.
Accounting theory in Europe and the United States has often been based on
debates related to the resolution of practical issues, such as the proper way to
measure assets and liabilities, the proper way to measure business performance, the
determination of allowable dividend payments, the protection of creditors in the
event of bankruptcy, and the taxation of corporations. The ways in which these
issues have been addressed have differed among accounting theorists, and even
among countries.
Beyond the industry's self-regulation, the government also sets accounting
standards, through agencies such as the Securities and Exchange Commission and
laws such as the Sarbanes-Oxley Act of 2002, passed after the Enron and
WorldComm accounting scandals.
The 21st century also saw the passage of the Dodd-Frank Act after the
recession of 2008. The act contains 16 major areas of reform, including creation of
the Financial Stability Oversight Council and the Volcker Rule that restricts banks
from owning, investing, or sponsoring hedge funds, private equity funds, or any
other type of proprietary trading operations that result in their own profit.
Accountants looking to the future have recognized that existing accounting
principals in place in the United States known as the Generally Accepted
Accounting Principals (GAAP), are likely to go the way of the dinosaurs at some
point in the not too distant future.
The global standard outside of the US is the International Financial Reporting
Standards (IFRS). As global commerce continues to grow, efforts are underway to
create consistent accounting standards across borders through the widespread
adoption of IFRS by American businesses and accounting firms who wish to
continue to participate in the global economy.
This paper identifies three major stages of development of international system
of accounting.
First stage: From the end of XIX century/beginning of XX century until the
middle of XX century. This stage is characterized by inception of the idea of having
an internationally accepted set of accounting standards, adoption of legislation in
various countries codifying their accounting principles, emergence of professional
accounting associations, rethinking of the role of accounting in the system of
management, and internationalization of information exchange among accounting

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