Toward global generally accepted accounting principles

Accountants worldwide inhabit a Tower of Babel. If accounting is the practical language of economics – that is, the way stories about contracts and exchange activities are told — a uniform set of syntax and grammar is required to ensure that high quality communication occurs. This happens for organizations operating within a single country, because they issue financial statements in accordance with that country’s Generally Accepted Accounting Principles (GAAP). However, despite the marked integration of the world’s economy in recent years, GAAP continues to vary substantially from country to country. This can cause a multinational organization to report dramatically different accounting results to stakeholders in different countries simply because the countries in which the organization operates have differing financial accounting rules. This article proposes a comprehensive conceptual model as a basis for the development of Global GAAP.