account regulations be a truly fundamental extremity inwardly industries of today. Over the past few decades, many issues arose due to the lack of answerability and trus dickensrthiness among large businesses, and these issues led to large strangle effects on the business world as a whole; home(prenominal) every(prenominal)y well as multi contently purge in much(prenominal) or less instances. In the following paper, re fastidiousive bodies much(prenominal)(prenominal) as: more often than non accepted invoice principles, IFRS, SEC, and PCAOB brook for be discussed in connection with devil study companies within the anoint industry: Transocean and band. report account criteria and how it differs amid these dickens major companies depart withal be discussed. When looking at interior(prenominal) and international companies exploitation banding and Transocean as examples, the regulative environments generate many similarities. As in public traded American companies, these two businesses ar undeniable to adhere to samples and regulations launch by joined States regulative bodies such as pecuniary bill Standards control control panel (FASB), which establishes slackly Accepted write up Principles ( in general accepted bill principles) standards in the US. referable to international operations, standards established by the outside(a) invoice Standards Board (IASB) mustinessiness be followed. The of import purpose of the IASB is to ?develop, in the public interest, a adept toughened of high quality, comprehensible and international monetary insurance coverage standards (IFRSs) for general purpose pecuniary statements? (IASB 2009). As a issue of the multitude of chronicle policies and regulators that these companies must be accountable for, pecuniary recording practices requisite to be more complex than domestic only companies. GAAPGAAP standards substitute from pastoral to country. To begin, US GAAP is very similar to IFRS. In 2008, the! U.S. Securities and substitute Com accusation (SEC) proposed that IFRS replace U.S. GAAP for U.S. public companies in 2010 to be completed by 2014 (Epstein, 2008). Surprisingly, manner of account statement standards in compliance with IFRS atomic physique 18 less detailed than those of the U.S. GAAP. However, convergence is important for those who enter in the orbiculate market. IFRSDespite the possibility of accepting the IFRS, U.S. companies argon legato required to follow the U.S. GAAP. The following atomic number 18 many examples of differences between the two standards. The 2008 website shows that the pooling of interests method is exceptionally used only when strict criteria argon met with the IFRS versus the U.S. GAAP purchase method only. Good allow for is strictly amortized with evil with IFRS and is not amortized with the U.S. Assets are measured by the recoverable add up in IFRS versus the fair look upon in the U.S. Retirement benefits are handled diversely in that gains or losings are strictly amortized in IFRS without corridor while they are corridor amortized in the U.S. The scope of subsidiaries in consolidated pecuniary statements is found on control in IFRS and is establish on mass voting interest in the U.S. The U.S. and IFRS in addition stick many similarities in the measurement of securities, estimating authorisation credit losses/impairment, realisation of monetary assets, measurement of dividends, sidestep be, basis methods of business combinations, classify of assets, and income taxes to name a few. The U.S. Securities and substitution agency, also kn protest as the SEC, is one of the main regulatory bodies in the unite States that rank the chronicle practices of publicly traded companies. ?The mission of the U.S. Securities and change Commission is to cling to investors, maintain fair, coifly, and efficient markets, and further capital formation? (U.S. Securities and rallying Commission, 2 009, Investors Advocate ¶ 1). To aid in achieving th! is mission, the SEC has established a number of laws and regulations to monitor the accounting practices of corporations and to discover that investors have access to a company?s complete and accurate fiscal records (U.S. Securities and Exchange Commission, 2009). One of the major recent achievements of the SEC was the foundation of the Sarbanes-Oxely (SOX) achievement of 2002, signed by President Bush (U.S. Securities and Exchange Commission, 2009). The purpose of the SOX was to hold corporations to a higher standard of function when it comes to their pecuniary records, and to increase investor confidence. PCAOBAnother regulatory board that oversees the accounting practices of publicly traded companies is the Public Company business relationship attention Board (PCAOB). The PCAOB is a nonprofit company created as a result of the Sarbanes-Oxley Act of 2002 (Public Company Accounting Oversight Board, 2009). The main purpose of the PCAOB is to ensure that the audit reports of corporations are accurate, reliable, and fair. This conclusion is achieved through a set of auditing standards implemented by the PCAOB, including evaluating the concord of a company?s monetary statements and monitoring native control over fiscal reporting (Public Company Accounting Oversight Board, 2009). Transocean Inc. and grade insignia are two publicly traded companies that must adhere to the standards set frontward by the SEC and the PCAOB. The entropy presented in the 10-K reports of each(prenominal) of these corporations complies with the established accounting standards by disclosing all pertinent pecuniary information to investors. In addition to disclosing pecuniary information to investors, Transocean and Chevron have also made their financial records operational to regulatory bodies such as the SEC, PCAOB, and others to examine and evaluate. Accounting Reporting Criteria in Transocean vs. ChevronRegulatory EnvironmentSome countries may have similar accounting regulatory systems, but according to Edmonds, McNair! , sexagenarian and Schneider, no two countries have exactly the same accounting regulatory systems. The International Accounting Standards Board (IASB) is an independent and in private held that develops and approves International financial Reporting Standards. The IASB adopted the International financial Reporting Standards usually referred to as IFRS. As it relates to environmental issues with conflicting gold, Chevron lot?s environmental regulation is unflinching by the subsisting laws in each of the countries in which the Group exits and within their own internal standards. The Group capitalizes expenditures that create future benefits or cave in to future r even outue generation. indemnity costs are accrued based on estimates of cognize environmental ikon even if uncertainties exist about the net cost of the remediation. Such accruals are based on the lift out available non-discounted estimated costs using data developed by third party experts. With the ente ring of the Sarbanes-Oxley Act of 2002 (SOX), the accounting practices of outside companies have merged with the practices of the join States accounting practices. Foreign currency conversion is an essential belief to U.S. and foreign accounting. Majority of Transocean?s revenues and expenditures are predominately in U.S. dollars. The tooth root for this is to limit Transocean?s exposure to foreign currency fluctuations. Transocean?s revenue had net losses of $3 million, $10 million and $3 million for the eld 2008, 2007 and 2006, respectively (Transocean 10-K, 2009). In order for Transocean, Inc. to report appropriately on global business drill in September 2006, the monetary Accounting Standards Board (FASB) issued SFAS zero(prenominal) 157, Fair Value Measurements (SFAS 157). This defines fair value, establishes a framework for beat fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Differences in GAAPWhen r eviewing both Chevron and Transocean?s methods of acc! ount recording, clear dividing line is apparent. Although the FASB strongly urges such large publicly owned integrated companies like Chevron and Transocean to comply with their Generally Accepted Accounting Procedures (GAAP), accounting methods impart catch ones breath pertinent to the most adept methods of business for each company. Chevron abides to the best of its ability by the FASB?s GAAP standards to ensure clear communication of its financial answerability.
According to line of work 1 of the Summary of solid Accounting Policies,The companys Consolidated monetary Statements are prepared in accordance with accounting principles generally accepted in the United States of America. These require the use of estimates and assumptions that imprint the assets, liabilities, revenues and expenses reported in the financial statements, as well as amounts included in the eminences thereto, including backchat and disclosure of contingent liabilities. (Chevron yearly Report 2008)In contrast, Transocean practices unconventional methods of financial recording that would be considered ?Non-GAAP? accounting procedures. To reconcile these methods, Transocean offers similar notability reports such as ? change Net Earnings and weaken Earnings Per Share? statements, ? ingrained Debt to Net Debt and Total swell to Tangible Capital Reconciliations? statements, and ? run Income Before General and administrative Expense to Field run Income? statements. Although GAAP procedures would be more plausible for U.S. standards, Transocean chooses alternative methods to apply its international business since it merged in the cayman Islands. The standar! d reporting requirements in the Cayman Islands also likely vary from the standards within the USA. As yearn as companies choose to operate in a global environment, there will be issues with the accounting reporting criteria based on the country of origin and the country of operations. The differences between Generally Accepted Accounting Principles will continue to plague financial report preparers though some resolution may be in sight. As the United States GAAP merges with the IASB standards, the flow of financial information that does not need adjustment across national boundaries will be expedited. The accounting reports submitted by Chevron and Transocean will continue to be influenced by the FASB and IASB convergence project in an attempt to make the standards more similar. Some of the standards however, will remain separate and unique due to the factors involving operations and financial aspects of global markets. Making financial records available to regulatory bodies such as the SEC, PCAOB, and others to examine and evaluate will also continue to be necessary for Transocean and Chevron in an effort to comply with requirements in operations. As discovered in this research, Transocean and Chevron employ different forms of financial recording and reporting. piece the result is the same concerning accountability requirements, Transocean was discovered to use some unconventional methods of recording, although it was required to lock in maintain the same levels of accountability through reporting the results in order to accommodate international business records. An important note to remember is also that Transocean is not a USA company. duration it operates within the USA, Transocean is incorporated in the Cayman Islands. This fact also influences recording and reporting criteria that is required and followed with the US division of Transocean. ReferencesChevron potbelly (2009). Chevron Annual Report, 2008. Retrieved July 7, 2009 fromhypertext transfer protocol://www.chevron.com/annualreport/200! 8/financials/notestothefinancialstatements/note1.aspxEdmonds, Edmonds, McNair, Olds and Schnieder. basics Financial Accounting Concepts. Retrieved through University of Phoenix eResources, retrieved on July 25, 2009. Epstein, Barry J. (2008). IFRS versus GAAP. Russell Novak & Co., LLP. Retrieved July 25,2009, from http://www.ifrsaccounting.com/IASB (2009). IASB-About us. Retrieved July 25, 2009 from http://www.iasb.org/About+Us/International+Accounting+Standards+Board+-+About+Us.htmPublic Company Accounting Oversight Board (2009). Retrieved July 23, 2009 from www.pcaobus.orgTransocean, Inc. (2009). Retrieved July 25, 2008 fromhttp://deepwater.com/fw/main/Non-GAAP-Financial-Measures-132.htmlTransocean, Inc. (2009). Retrieved July 25, 2008 from http://www.deepwater.com/fw/main/default.asp?DocID=57&FilingType=10-K& page=1U.S. Securities and Exchange Commission (2009). Retrieved July 22, 2009 from www.sec.gov If you want to get a entire essay, order it on our website:
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