SEC has failed to provide clarity: ICAEW

A peak UK accounting group said the US has failed to provide clarity surrounding its adoption of international accounting standard.

Dr Nigel Sleigh-Johnson, head of financial reporting at the ICAEW, said the US Securities and Exchanges Commission (SEC) has still not provided certainty on America’s long-term commitment to international accounting standards.

The comments follow yesterday’s announcement from the SEC that, while it supported global accounting standards, it would hold off making a final decision on US adoption until 2011, and companies could use international rules no earlier than 2015.

Sleigh-Johnson believes this approach will disappoint those hoping for a clear signal from the SEC.

"Stakeholders across the world have been awaiting clear signals from the SEC as to how and when it is going to start the process of completing the convergence to international financial reporting standards,” he said.

“Those looking to the SEC to provide clear leadership…may feel that (the) statement from the SEC fails to provide the reassurance they sought; that the US journey towards an (international standards) is well on track.”

In her statement yesterday, SEC chairman Mary Schapiro, said she will investigate what international standards mean for US companies and when or how international standards should be incorporated.

“Incorporating IFRS into our financial reporting system would involve a significant undertaking. We must carefully consider and deliberate whether such a change is in the best interest of U.S. investors and markets,” she said.

Read the full SEC statement: SEC Approves Statement on Global Accounting Standards