The Securities and Exchange Commission voted to issue a statement that lays out its position regarding global accounting standards. They want to make it clear that “the Commission continues to believe that a single set of high-quality globally accepted accounting standards would benefit U.S investors.”
By 2011, the SEC will decide whether to incorporate IFRS into the U.S. financial reporting system, and if so, when and how. In trying to reach a decision, the SEC has published a Work Plan. It has six key areas:
- Sufficient Development and Application of IFRS for the U.S. Domestic Reporting System
- Comprehensiveness
- Auditabilitity and Enforceability
- Consistent and High-Quality Application
- The Independence of Standard Setting for the Benefit of Investors
- Investor Understanding and Education Regarding IFRS
- Examination of the U.S. Regulatory Environment that Would Be Affected by a Change in Accounting Standards
- The Impact on Issuers, Both Large and Small, Including Changes to Accounting Systems, Changes to Contractual Arrangements, Corporate Governance Considerations, and Litigation Contingencies
- Human Capital Readiness
Certainly it would be better to have a single universal accounting standard. But is IFRS better than GAAP, worse than GAAP, or just different?
Sources:
- SEC Press Release – SEC Approves Statement on Global Accounting Standards
- Commission Statement in Support of Convergence and Global Accounting Standards (.pdf) Release Nos. 33-9109; 34-61578