It may be the home of the world’s largest capital markets, but the US needs
more time to make sense of IFRS, its leading accounting figures have warned.
Bob Herz, the head of the US Financial Accounting Services Board, has
suggested that the Securities and
Exchange Commission should back off from the standard-setters’ convergence
Appearing before a US senate hearing, Herz conceded that pressure to complete
the convergence project has increased, but warned that rushing convergence could
compromise its aim.
In a bid to push things along, the SEC put out a proposal, discussing the
possibility of allowing foreign companies listed in the US to file their
accounts using IFRS. The watchdog has also proposed giving US companies the
option of choosing US GAAP or IFRS.
But this could result in a dual accounting system, which could hinder the
ultimate goal of convergence. Others have also raised concerns about moving too
Lynn Turner, a former SEC chief accountant, said US investors’ ‘ability to
analyse the financial statements of companies preparing IFRS in a meaningful
fashion will be limited’.
Former IASC secretary-general David Cairns also warned that US accounting
professors ‘are generally not teaching IFRS’.
‘It [the US] should set itself a deadline of using IFRS as we did in Europe
and get everyone to change: companies auditors and teachers,’ said Cairns.
The IASB and FASB are under increasing pressure from multinationals to forge
ahead with convergence as quickly as possible, but opposition to moving too fast
seems to be building with equal fervour.