#TBT: Convergence of International Accounting Standards Before Convergence Was Cool*

If you are one of the lucky few who has taken the CPA exam since IFRS was added into the mix, you may be surprised to know we've actually been at this whole convergence thing for some time. Except it wasn't always called convergence.

Says FASB:

The 1960s—Calls for International Standards and Some Early Steps
Interest in international accounting began to grow in the late 1950s and early 1960s due to post World War II economic integration and the related increase in cross-border capital flows.

1962—8th International Congress of Accountants Is Held—Many See a Need for International Accounting and Auditing Standards
The American Institute of Certified Public Accountants (AICPA) hosted the 8th International Congress of Accountants. The discussion focused on the world economy in relation to accounting. Many participants urged that steps be undertaken to foster development of auditing, accounting, and reporting standards on an international basis.

The world was a different place back then as we know. It's entirely possible the fictional clients of Mad Men's Puttnam, Powell, and Lowe wouldn't have auditors doing their inventory, even. Writes accounting historian (yes that's a thing) Stephen A. Zeff of Rice University in The Evolution of the IASC into the IASB, and the Challenges it Faces:

Sir Henry Benson (later Lord Benson), senior partner in the U.K. firm of Cooper Brothers & Co. (later Coopers & Lybrand and now part of PricewaterhouseCoopers) and the 1966–1967 president of the Institute of Chartered Accountants in England and Wales (ICAEW), led a movement to tackle the issue of diverse accounting practices. Benson, who was born and bred in South Africa and then immigrated to the U.K., was a determined and resourceful man. In 1966, he persuaded the AICPA, the Canadian Institute of Chartered Accountants (CICA), the Institute of Chartered Accountants of Scotland, and the Institute of Chartered Accountants in Ireland to join with the ICAEW to form the Accountants International Study Group (AISG). The AISG issued a series of booklets that compared the accounting and auditing approaches in the U.S., Canada, and the U.K. Among other things, Benson hoped that a comparison of auditing approaches in the three countries would, at long last, convince the U.K. accounting profession to require the auditor to be present at the taking of inventory, and he succeeded in that endeavor. Over a period of more than ten years, the AISG issued 20 such booklets, which represented the first major effort to compare and contrast accounting and auditing practices across leading countries (CZ 2007, 26–36). The AISG booklets highlighted the diversity in practice among the three countries and, therefore, the non-comparability of financial statements across borders.

So you see, heel-dragging on the part of all involved parties to come together and agree on a single set of international accounting standards is nothing new. In fact, it's older than most of us. I'm not sure if that should make you feel better or worse, come to your own conclusions on that.

*Not really cool in the U.S.; HANDS OFF OUR GAAP!

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