Regulatory Bodies Concerning Transocean vs. Chevron

account regulations be a actually fundamental destiny indoors industries of today. Over the past few decades, numerous issues arose due to the lack of answerability and trus dickensrthiness among large businesses, and these issues led to large view as got the outdo effects on the business world as a whole; case every(prenominal)y well as multinationally purge in more(prenominal)(prenominal) or less instances. In the following paper, re exigentive bodies much(prenominal)(prenominal) as: more often than non accepted invoice principles, IFRS, SEC, and PCAOB concede for be discussed in connection with devil study companies within the petroleum industry: Transocean and band. report account criteria and how it differs amongst these dickens major companies depart as well be discussed. When looking at domestic help and globose companies exploitation banding and Transocean as examples, the regulative environments have many similarities. As in publi c traded American companies, these two businesses ar undeniable to adhere to samples and regulations launch by joined States restrictive bodies such as pecuniary bill Standards control empanel (FASB), which establishes primarily Accepted write up Principles ( slackly accepted score principles) standards in the US. ascribable to international operations, standards established by the outside(a) score Standards Board (IASB) mustinessiness be followed. The of import purpose of the IASB is to ?develop, in the public interest, a ace adapt of high quality, comprehensible and international monetary account standards (IFRSs) for general purpose pecuniary statements? (IASB 2009). As a turn up of the multitude of chronicle policies and regulators that these companies must be accountable for, fiscal recording practices requisite to be more complex than domestic only companies. GAAPGAAP standards substitute from pastoral to country. To begin, US GAAP is very sim ilar 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, method acting of account statement standards in compliance with IFRS atomic material body 18 less detailed than those of the U.S. GAAP. However, convergence is important for those who move into in the orbicular market. IFRSDespite the possibility of accepting the IFRS, U.S. companies argon quieten required to follow the U.S. GAAP. The following argon 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 be 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 entertain in the U.S. Retirement benefits are handled contrastingly i n that gains or losses are strictly amortized in IFRS without corridor while they are corridor amortized in the U.S. The scope of subsidiaries in consolidated fiscal statements is establish on control in IFRS and is establish on volume voting interest in the U.S. The U.S. and IFRS in addition have many similarities in the measurement of securities, estimating authorisation credit losses/impairment, acquaintance of fiscal assets, measurement of dividends, sidestep be, basis methods of business combinations, radical 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 enjoin the chronicle practices of publicly traded companies. ?The mission of the U.S. Securities and deepen Commission is to cherish investors, maintain fair, coifly, and efficient markets, and further capital formation? (U.S. Securities and diversify Commission, 2009, Investor s Advocate ¶ 1). To aid in achieving this mission, t! he SEC has established a number of laws and regulations to monitor the accounting practices of corporations and to fasten that investors have opening to a company?s complete and accurate monetary records (U.S. Securities and Exchange Commission, 2009). One of the major recent achievements of the SEC was the governing body of the Sarbanes-Oxely (SOX) solve 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 obligation when it comes to their monetary records, and to increase investor confidence. PCAOBAnother regulatory board that oversees the accounting practices of publicly traded companies is the Public Company be 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, re liable, and fair. This conclusion is achieved through a set of auditing standards implemented by the PCAOB, including evaluating the concord of a company?s financial statements and monitoring native control over financial reporting (Public Company Accounting Oversight Board, 2009). Transocean Inc. and grade insignia are two publicly traded companies that must adhere to the standards set frontwards 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 financial information to investors. In addition to disclosing financial 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 ac cording to Edmonds, McNair, superannuated and Schnei! der, no two countries have exactly the same accounting regulatory systems. The International Accounting Standards Board (IASB) is an independent and in camera 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 money, Chevron lot?s environmental regulation is resolute 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. indemnification costs are accrued based on estimates of know environmental picture show even if uncertainties exist about the last-ditch cost of the remediation. Such accruals are based on the best available non-discounted estimated costs using data developed by third party experts. With the entering of the Sarb anes-Oxley Act of 2002 (SOX), the accounting practices of international companies have merged with the practices of the unify 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 hanker time 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 re viewing both Chevron and Transocean?s methods of acco! unt recording, clear railway line is apparent. Although the FASB strongly urges such large publicly owned bodied companies like Chevron and Transocean to comply with their Generally Accepted Accounting Procedures (GAAP), accounting methods allow die hard pertinent to the most in effect(p) 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 business.

According to line of work 1 of the Summary of substantive Accounting Policies,The companys Consolidated monetary Statements are prepared in accordance with a ccounting 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 follows thereto, including countersign 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 famous reports such as ? change Net Earnings and diluted Earnings Per Share? statements, ? ingrained Debt to Net Debt and Total gravid 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 i t combine in the caiman Islands. The standard repo! rting requirements in the Cayman Islands also likely vary from the standards within the USA. As long 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 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. speckle 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 tum (2009). Chevron Annual Report, 2008. Retrieved July 7, 2009 fromhypertext transfer protoc ol://www.chevron.com/annualreport/2008/financials/not! estothefinancialstatements/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& rogue=1U.S. Securities and Exchange Commission (2009). Retrieved July 22, 2009 from www.sec.gov If you want to get a liberal essay, order it on our website: OrderCustomPaper.com

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