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The Journey Towards a Global Accounting Language

• Financial statements are the main source of information for stakeholders about a company's business.
• Accounting principles are the rules for translating transactions into financial statements.
• International Accounting Principles were created to facilitate the development of global financial markets.
• The two approaches for even out financial information globally are standardization and harmonization.
• The European Community and the IASB have been engaged in a journey to determine a unique accounting language and system of conventional rules.
• The journey is getting to a universal accounting language that is generally accepted and shared from a technical and meaning point of view.
• The accounting system we have today was inherited from Italian merchants and systematized by Luca Pancioli in the XV century.
• The linkage between fraudulent insolvency and irregular bookkeeping was discovered by Italian merchants.
• In the XVII century, France ruled the "Ordonnance de commerce" which forced merchants to do regular bookkeeping.
• In the USA, the Securities and Exchange Commission (SEC) was established in 1934 to supervise the stock exchange.
• The Financial Accounting Standard Board (FASB) was established in 1973 as the agency for ruling the accounting principles and practices in the USA.
• The International Accounting Standards Board (IASB) was established in 2000 to produce generally accepted principles within European public companies.