Tweedie warns US to adopt standards or lose influence

Well said, Sir David

Since those heady days when Sir David informed Capitol Hill of the need for a "gold standard" much ground has been ceded to US standard setters, to the detriment of comprehensibility of financial reports and of audit perceptiveness on treatment of financial instruments amongst other aspects. Time to ditch an overly-academic approach; to get back to a basis which the business community and not just the investment analyst community can understand (and I do not believe their understanding can be taken for granted), and letting the USA know that it has no God-given right to influence what it will not adopt is a good start.

Posted by: Professor David Kinnon , 11 Aug 2010 | 00:00

Global accounting standard? Just say no!

To all, please make sure you educate yourself on the underlying implications of a U.S. adoption of IFRS before joining the blind march towards the point of no return. The Big 4 want to fill their already overflowing coffers with the potential IFRS related work. It's the next SOX in that respect and very much a political issue as well. The last thing many educated CPA's and accounting professionals feel the U.S. and the World needs right now is a reduction in the competition between accounting standards. Wiping out GAAP, the gold standard of the World, could potentially reduce the quality of future IFRS standards. Furthermore, IFRS purports to be a magical cure all for investors in that financial information is more comparable and transparent, when in reality, it allows for different countries with different business cultures etc. to carve out their own special brand of IFRS to suit their needs. Also, it allows more management discretion(e.g. wiggle room), and ability to cook the books. The European nations have historically been rife with accounting manipulation that is well hidden as their cultures allow for this to happen. Here in the U.S. we actually have a lower overall level of accounting manipulation and are more transparent in our business dealings and accounting largely in part to our gold standard U.S. GAAP. There are a myriad of other great reasons not to switch to IFRS. Be careful what you wish for people! Sir David Tweedie Bird please admit that at the crux of the matter, this is really a power play and a money maker for the Big 4. I recently took a class on IFRS in my masters in tax program and after researching the topic I now see thru the BS of IFRS. I support a convergence of standards but not an adoption by the U.S.

Posted by: Concerned U.S.A. CPA , 11 Aug 2010 | 00:00

Mark to market - Financial Crisis

The US FASB allowed mark to market in 2006 as a significant festure and step toward global accounting convergence, In two quick years MTM accounting practices demonstrated itself to be a major contributing factor to a massive financial crisis and general breakdown in trust. No one could trust the deciders of economic value banking cartel and cabal's MTM prices. The market for their "products" quickly became illiquid.

MTM breeds good buyers, but fails to require businesses to sell their wares at a profit. The mob mentality of MTM eventually leads to a massive breakdown in trust.

We did not have a finanical crisis in the USA until after oil prices collapsed. Remember the inexplicable hockey stick chart for oil?

If not, please read this link:

http://www.bakerinstitute.org/publications/EF-pub-MedlockJaffeOilFuturesMarket-082609.pdf

Unless Sir Tweedie and the IASB are willing to concede the obvious dangers of MTM in practice and the 2006-2008 reality, his influence in global accounting affairs will continue to diminish throughout the global financial markets.

Posted by: Alien in the White House , 11 Aug 2010 | 00:00

Time to make a decision....

I couldn't agree more with this stance. I spend a good bit of my time training accountants and auditors all over the world in implementing international standards and it does no good to credibility in an increasingly globalised environment when govts (or to be more accurate regulators) pick and choose what they adopt. International standards should be exactly that - international. I fear resistance to change is more influenced by not liking the answers they give; perhaps all becomes a bit too transparent?

Posted by: Wayne Bartlett , 11 Aug 2010 | 00:00

Easier said than done

Turning over accounting regulation of the world's largest economy to an international board is a ridiculous idea. Maintaining control of the principal mechanism by which companies communicate their results is worth far more than the minor inefficiencies (in the big picture) created by different standards.

Posted by: John Doe , 11 Aug 2010 | 00:00

Enron, WorldCom, HealthSouth, AIG, Lehman Brothers, Bear Stearns etc., etc.

I'm an American and I've worked as a CPA for nearly 20 yrs, including a number of years with a Big Four firm, but have been in the private sector for the latter half with half of my career spent overseas and I continue to spend all of my time working internationally. I can tell you that if people think US GAAP is the gold standard then it's perhaps time to retire or leave the field of accounting/financial reporting (check the companies in the comment title - I stopped due to space restrictions). US GAAP is a rules-driven spider web that prior to codification was coupled with loads of acronyms and various bodies (FASB, EITF, SOPs, FSPs, etc.) - and you needed a guy in a white lab coat to ensure you covered everthing when you sought to research a topic/issue/question. Also, there is a much wider picture to look at here than just accounting - capital is leaving U.S. markets because we are no longer the gold standard. The world is now (and has been for some time) a global market/community (like it or not). It's time to avoid putting the U.S. on an island - we are a very big global player, but we are no longer the only big kid on the block. Lastly, the G20 (including our President-elect) has been pushing for one global standard - and yes, IFRS in one country does not (now) equate exactly to IFRS in another country. But remember, these countries are changing their accounting regime just as the U.S. is currently contemplating a change - and these changes take time and eventually, the world will get there and I hope the U.S. is part of that envoy.

Posted by: A concerned patriot and CPA , 02 Sep 2010 | 00:00