Cayla Mabie

Project 1: Discourse Analysis

Professor Walzer
2/2/16
Accounting for Globalization
Accounting standards are the foundations that companies, non-profits, governments, and
other organizations use to disclose financial information, in order to glean how well an
organization is managing its resources. Accountants use standards to communicate information
with uniformity to executives and investors and it is then presented in the form of annual reports.
With this information, users can prepare budgets, make investing decisions and many other types
of decisions and analysis. Standards are ever changing, requiring companies to constantly
monitor for updates in order to adhere to protocol. The United States uses different accounting
standards than the rest of the world, which is a major discourse in the accounting world. As a
result, the financial reporting process is different transnationally. Through a companys annual
reports, investors are provided with financial statements and explanations of financial
performance in the last period and the goals for future periods to potential investors. I will
discuss how a companys annual reports and how the convergence of the two systems of
accounting standards is smoothing the path to globalization.
In the United States, the Financial Accounting Standards Board (FASB), a board of seven
members, developed the Generally Accepted Accounting Principals (GAAP) that constitutes the
rules all entities in the U.S. must follow when accounting and preparing financial statements. All
of these standards and rules for annual reports, and accounting in general, can be found in
FASBs Codification Research System: an electronic research systemwhich houses,
reorganizes and indexes United States financial accounting standards and related literature
(FASB Accounting Standards Codification). The codification system lays out the rules for users
in order to guide them in the financial reporting process. This system was constructed in 2009 to
give more user-friendly access to accountants, students, and other users. The codification system
is directed internally, towards those who are working through the accounting process, whether
that be in school or in practice. All companies filed in the U.S. must conform to GAAP, and with
the creation of the codification system, accountants can better understand the regulations being
issued by FASB. The writing is very informative and explanatory, and all of the information is
laid out in subsections making it easy to navigate as such: See paragraph 210-10-S99-1,
Regulation S-X Rule 5-02.1, for disclosure requirements for cash and cash items that are

restricted as to withdrawal or usage (FASB). The language of this system is not simple, but with
the use of reference numbers it is navigable. FASBs codification system is an incredible tool for
companies and accounting professionals to reference to ensure compliance with GAAP.
All of these rules and standards that are being communicated to accountants are
guidelines for creating reports, which then communicate information to end users. Annual and
quarterly reports are used on a regular basis to make many different types of business and
investing decisions. These reports are public and can be found on the companys website, and are
used by a wide range of users. I was exposed to this type of information first hand when I was on
co-op at NxStage Medical. For example, in NxStages 2014 annual report, the company
discusses how commitment to patients is the hallmark of our company and the very reason for
our success (2014 annual report). The language in the report is very formal and sensational, but
is also informative because a company uses these reports to disclose information to investors of
their performance and goals. They are written by a companys management and are intended for
external users such as investors. Annual reports are a major factor in communicating and
summarizing business information as well as financials to users outside the company.
For companies located outside the U.S., the International Accounting Standards Board
(IASB) established International Financial Reporting Standards (IFRS). In his article The Impact
of Combining the U.S. GAAP and IFRS, Nicolas Pologeorgis explains how IFRS seeks a
workable solution to alleviate the existing complexity, conflict and confusion created by
inconsistency and the lack of streamlined accounting standards in financial reporting. These
standards are communicated to users the same way GAAP is in the U.S., however some of the
content varies. There are some minor differences between the two systems, but the main
distinction being that GAAP is more specific with the rules, whereas IFRS allows for more
interpretation. This comes across in the presentation of the systems because GAAP is more rule
based and IFRS is more principle based. Although two different sets of accounting standards
remain, there are many convergence efforts being made to unify accounting standards. For
example, FASB released a converged revenue recognition standard beginning January 2016.
This standard is more similar to that of the revenue recognition of IFRS. These convergence
efforts are changing the way accounting standards are being communicated and are changing the
mission of these organizations as Pologeorgis explains that FASBs original mission has always
been to establish the U.S. GAAP and standards for accounting and financial reporting; however,

the mission has been enhanced to include the convergence and harmonization of U.S. standards
with international ones (IFRS).
Annual reports as well as the codifications system reflect these convergence efforts. In
NxStage Medicals annual report it shows how certain immaterial reclassifications have been
made to prior periods financial statements to conform to the 2014 presentation (2014 annual
report). These accounting standards are not very visible to those not directly utilizing accounting
information; however, these accounting standards affect globalization because the U.S. has a
different system than the rest of the world. This makes it more difficult for multinational
companies to file reports because it can be difficult to discern which standards should be
followed in certain situations. One system would make for a simpler, more streamlined process.
Having one system for accounting standards could help lead globalization from a business
standpoint because if the regulations align, the rest of the business processes are easier to follow.
If GAAP and IFRS were combined, this would affect corporate management, accounting
professionals, investors, and stock markets. Overall, it would lower the cost of business as well
as costs accompanying foreign exchanges, provide for a simpler process without needing to
convert standards, and increase the international flow of capital, all of which drive globalization.
In pursuing accounting as a profession, I am directly affected by these changes through
accounting classes, work, and preparing to take the CPA exam. When there are changes to the
codification system or adjustments that need to be made to the annual reporting process,
accountants in the field usually receive this information from the company in which they work at
through update memos. Students however are not exposed to this information in the same way
because therefore it is usually communicated to them through professors and the content of
accounting classes. When I worked at NxStage Medical on co-op, I worked in the finance and
accounting department for our headquarters in Lawrence, MA. On occasion, I would work in
international finance in order to be exposed to more operations of the business and I was able to
see how certain procedures were different. Although there were different procedures, the entire
company must report under GAAP because we are filed within the U.S., and even though we
have business in other countries, it would be too complex and noncompliant to follow GAAP and
IFRS standards.
Globalization is a leading development in all professions and the artifacts presented share
information throughout the accounting world. It is believed that the use of IFRS in the United

States by public companies will not be required for the foreseeable future. Howeverknowing
both accounting frameworks, being financially bilingual, is increasingly important for US capital
market participants (IFRS and US GAAP: Similarities and Differences). FASBs Research
Codification System and companies annual reports present accounting information in writing,
which is used professionally and academically. Being well versed in accounting standards is
essential to communicating effectively and efficiently within the accounting world.

Works Cited
FASB Accounting Standards Codification. Financial Accounting Standards Board, 1 July 2009.
Web. 1 Feb. 2016. <https://asc.fasb.org/>.
IFRS and US GAAP: Similarities and Differences. N.p.: n.p., 2015. PricewaterhouseCoopers.
Web. 1 Feb. 2016. <http://www.pwc.com/us/en/cfodirect/assets/pdf/accountingguides/pwc-ifrs-us-gaap-similarities-and-differences-2015.pdf>.
Pologeorgis, Nicolas. "The Impact of Combining the U.S. GAAP and IFRS." Investopedia. N.p.,
16 Oct. 2012. Web. 1 Feb. 2016.
<http://www.investopedia.com/articles/economics/12/impact-gaap-ifrsconvergence.asp>.
2014 Annual Report. N.p.: n.p., n.d. NxStage Medical. Web. 1 Feb. 2016.
<http://files.shareholder.com/downloads/NXTM/1441485808x0x822965/7D0347813111-4254-B977-ECB36218A3F4/NxStageMedical_Annual.pdf>.

Reflection and Self-Assessment

In the beginning of this writing process I found it easiest to write down as much as I
could on the artifacts that communicate accounting, basically as if I were explaining accounting
regulations to someone who had no background in such. I believe this helped me to get started
because a portion of this project is a profile, which is explanatory in nature. In addition to
critically analyzing my artifacts, by reading articles about the discourse in the accounting field, I
have a better understanding of how accountants use these artifacts and see globalization. At first
I found it difficult to connect the writing style analysis of my artifacts with how they relate to
globalization. However, what helped me with this was the peer review, reading others papers,
and rereading the assignment multiple times.
I found the peer review and comments to be the most helpful in revising and when
restructuring my work. Also by thinking critically on how another can improve on his paper,
helped me to figure out what to look out for in my paper. Because this is an online class it can be
more difficult to understand the assignment due to the fact that it is not being explained in
person. From reading others papers and their peer reviews, I realized I was off track with the
main objectives of the assignment. I was then able to turn around and rework my draft to align
my main points with the purpose of the assignment. I learned that the peer reviews would have
been even more useful if my draft was more developed with supporting evidence so I could
receive better input on how to revise my paper.

Genre: Effectively identifies modes of writing in academia,

in the profession, and in the discourse community. Shows
effective use of citation conventions. Effectively
demonstrates your sense of the discourse communitys
perspective on globalization. Demonstrates anticipation of
genre and audience expectations in your own writing.

FASBs Codification Research System and Annual Reports are

two artifacts that communicate information within the accounting
world professionally and academically. I used passages from both
artifacts as well as quotes from other articles in order to relate it to
the opinion of the discourse community and show the language of
the artifacts.

Rhetoric: Demonstrates understanding of rhetorical situation

and audience needs in the specific discourse. Effectively
locates the writers own relation to the modes of writing
within the profession.

Analysis: Demonstrates careful reading of the artifacts/texts

chosen for investigation. Demonstrates analysis of genre,
author/s, purpose, audience, context, sources, content level,
format, language and visuals. Uses sufficient examples.
Demonstrates your sense of the discourse communitys
perspective on globalization.

I believe if someone was reading my paper that had no previous

knowledge or experience with accounting, they would have still
been able to understand the discourse and how it is affected by
globalization. I also related my own experience with the written
artifacts.
I believe I successfully showed how my two artifacts, the
codification system and annual reports, communicate information
to the intended users, and how these methods of communication
are moving towards globalization.

Style: Demonstrates careful crafting, including structure,

with respect for his/her primary audience. Is sufficiently
developed. Demonstrates clear writing and is grammatically
correct.

Total:
18/20

The structure of this paper is logical and in the end ties my points
together to the main message of the assignment.