INTERNATIONAL Accounting Standards Board (IASB) chairman Hans Hoogervorst is confident that the US is on the verge of converging with international accounting standards.
However, the process of replacing US GAAP with international accounting rules could feel like "Chinese water torture".
Speaking at the Economist CFO Summit in London, Hoogervorst told delegates that he expects US regulators to ‘take a positive decision' to adopt the IASB's international accounting rules.
Hoogervorst said James Kroeker, chief accountant at the US Securities and Exchange Commission, had been very upbeat about the likelihood of the US adopting IFRS and that a decision will be made in the next couple of months.
"It going to be a very cautious decision," Hoogervorst said, adding that he didn't expect the US to adopt IFRS "lock, stock and barrel" within the next three years, but that advice would be sought from US standard setter, the FASB.
Other countries like Japan and India would likely follow suit, he said.
Allaying concerns that IFRS have become more, and not less, rules-oriented over the last five years, Hoogervorst told delegates that he is a firm believer in principles-based regulation and that he likes to think the IASB is still principles-based.
Hoogervorst also weighed in on the debate over the European Commission's plans to radically shake-up the audit market, saying plans to speed up the rotation of auditors and to limit the amount of non-audit services accountancy firms provide was a "step in the right direction".
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