… in an article by Stephen Labaton in today’s (July 5) New York Times: “Accounting Plan Would Allow Use of Foreign Rules
Referring to SEC’s anticipated roadmap that is expected to permit – or require – U.S. public companies to file with the SEC in International Financial Reporting Standards (IFRS) established by the International Accounting Standards Board (IASB),
Labaton states: “The commission is preparing a timetable that will permit American companies to shift to the international rules, which are set by a foreign organization and give companies greater latitude in reporting earnings.” (For background, see also our coverage of FASB’s June 16 Forum
on High Quality Global Accounting Standards.)
The timing of release of SEC’s ‘roadmap’ or proposal(s) may be imminent, according to at least the message between the lines of Labaton’s article - as he notes the SEC is now at its full panoply of 5 commissioners, and adds that SEC Chairman Christopher Cox would need just two commissioners to vote with him to release the proposal. [Note: as we reported on June 27, the Senate confirmed the nominations of Luis Aguilar, Troy Paredes, and Elisse Walter to become commissioners of the SEC, filling the positions formerly held by Commissioners Roel Campos, Paul Atkins (who agreed to stay until his successor is named), and Annette Nazareth. Upon being sworn in, the three will join Chairman Cox and Commissioner Kathleen Casey.]
Although SEC leadership has called for a global strategy in a world of increased mobility of capital and trading platforms, as noted by Labaton, some fear turning over responsibility for accounting standards, oversight of foreign broker-dealers and inspection of foreign audit firms, to foreign entities.
Labaton quotes Duke law professor James D. Cox, [a previously rumored candidate to fill one of the open commissioner positions at the SEC] as saying, “’We would not for a moment tolerate having American auto safety standards set by China or India. Why should we do it for financial safety standards? There has to be some accountability.’” NYT’s Labaton then provides some specifics on how mutual recognition may play out in enforcing the securities laws.
Further on the topic of IFRS, you can find highlights from FEI’s
June 5 conference, “The World is Moving to IFRS – Are You?” sponsored by BNA Tax and Accounting
, in the Financial Reporting
column of the July-August issue of Financial Executive Magazine. [Nonmembers of
FEI will be prompted to create a free login account to read articles posted online; FEI members receive hardcopy of the award-winning magazine and can read articles online, see info about FEI membership
] See also the online exclusive, “The Road to IFRS Implementation
,” by KPMG
Partner Paul Munter. UPDATE: To learn more about Canada's experience in implementing IFRS, see Darla Sycamore's blog, IFRS Canada: The Devil is in the Details
. With stints as a CFO and accounting professor, Sycamore is a member of the board of trustees of FEI Canada's
Financial Executives Research Foundation (CFERF
), but writes her blog in her personal capacity.
FEI has taken a leadership role in educating its members – CFOs, Treasurers, Controllers, Tax Directors, and other senior financial executives – on major issues like eXtensible Business Reporting Language (XBRL),
continuous improvement in corporate governance, and IFRS.
Upcoming conferences of interest include our annual Current Financial Reporting Issues (CFRI
) conference scheduled for Nov. 17-18 in NYC, and a one day IFRS boot camp on Nov. 19 in NYC sponsored by Deloitte
entitled, “Tools for Converging to a Single Set of Standards
.” See also our Women in Financial Leadership conference
scheduled for Sept. 17 in NYC, and our Private Company Forum
set for Sept. 23 in Chicago.