PracticeConsultingUS GAAP could rule the world

US GAAP could rule the world

The European Commission's head of financial reporting has urged the global standard setter to pay more attention to Europe, or US accounting rules could become global.

Karel van Hulle, who has been pivotal in preparing Europe for the adoption of global accounting standards, told a gathering of international accountants: ‘The IASB should listen to Europe. It is after all its biggest customer.’

Speaking at ACCA’s conference on global standards, van Hulle added: ‘The IASB will live if it comes true in Europe. If not it might be the end of the IASB and an invitation for the US to have its GAAP as international rules.’

Iosco, the club of global stock exchange regulators, has endorsed a set of global standards for international use but the US has still not committed.Van Hulle warned: ‘The Securities Exchange Commission should learn that maybe there is life beyond US GAAP.’

‘It is essential that we find the ways and means to lower the cost of capital and help investors. We will increase competitiveness of Europe and importance of it in the world,’ he added.

Outlining the IASB agenda and responding to van Hulle, Geoffrey Whittington, UK liaison board member at the IASB, said: ‘We’ve got to do a balancing act. When Karel’s happy, the SEC isn’t and Japan isn’t and Australia isn’t. The board has the advantage that we do span the world and have a good balance.’

As for concerns over IASB’s failure, Whittington added: ‘There are a lot of forces at work. It’s bound to work. We’re talking about capital forces. Money talks. I think the underlying forces are on our side.’

A European ruling means that Europe’s 7,000 listed companies must adopt IASs by 2005. The ruling means that the IASB’s work load has doubled in order to meet the 2005 deadline.

Links

To find out more about the IASB’s agenda visit IASB website

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