Companies continue to face business challenges arising from the financial crisis and the recession and from the changing regulatory landscape and new corporate governance requirements stemming from the Dodd-Frank Act. Major new accounting standards and financial reporting requirements can also pose significant challenges for companies. While these new standards can bring about improvements in accounting and financial reporting, they can also be costly to implement, and the resulting changes in reported earnings and financial position can affect debt covenants and other contractual arrangements, compensation plans, and business practices.
Certainly, over the last decade we’ve seen many changes in the accounting and financial reporting standards, rules, and regulations. Additional significant changes are in the offing for U.S. companies, as the U.S. Financial Accounting Standards Board and the International Accounting Standards Board continue their program of converging accounting standards and the Securities and Exchange Commission evaluates the potential of “incorporating” International Financial Reporting Standards issued by IASB into the U.S. financial reporting system.
