It's time for the US to show some leadership on convergence: ICAEW

The UK’s peak accounting body has urged the US to send a “clear signal” and steer the world’s largest economy towards mandatory adoption of global accounting rules.

Dr Nigel Sleigh-Johnson, head of the financial reporting faculty said the world needs clarity over the US’s commitment to global standard.

"More and more countries are converging to IFRS, with major economies such as Canada and Japan currently in the late stages of convergence,” he said.

"Now is the time for the SEC to show leadership to the world at a time of continued economic uncertainty.”

The comment comes ahead of a SEC meetingto "consider whether to publish a statement regarding its continued support for a single-set of high-quality globally accepted accounting standards and its ongoing consideration of incorporating International Financial Reporting Standards into the financial reporting system for U.S. issuers."

The world is looking to the US for a decision on a proposed adoption roadmap which has haunted the SEC since before the inauguration of Barack Obama.

While the SEC has been focused on domestic regulatory concern, economies around the world, including Brazil, Canada, Japan, India among others, still wait for a clear indication of its commitment to international standards.

A commitment by the SEC may counter the disproportionate influence the EU exerted on standard setting.

Sleigh-Johnson said the US has the opportunity “to transform the global financial reporting environment at a time when the interdependencies of capital markets worldwide have never been clearer.”

“Clarity over this issue is likely to bring substantial long-term benefits to investors not only in the US, but around the world, especially in the several jurisdictions awaiting a clear signal on US intentions before making a final decision about switching to IFRS reporting.”

Further reading: SEC considers reaffirming commitment to global standards