RegulationAccounting StandardsFRC brokers IFRS deal with US watchdog

FRC brokers IFRS deal with US watchdog

The FRC and the SEC agree to exchange confidential IFRS information

Paul Boyle, chief of the Financial
Reporting Council
, and Christopher Cox, chair of the SEC have
agreed to share information on the application of IFRS by US and UK issuers.

The agreement, signed at the FRC’s London offices yesterday, marks a further
step in the both the US GAAP/IFRS convergence programme and cross-border
regulation.

Boyle said a closer working relationship between the FRC and SEC was ‘in the
interests of users and preparers of financial statements’.

Cox, who signed a similar agreement with the FSA, said the ‘confidential
exchange of information between the SEC staff and the staff of the FRC’ was
‘critical to the future of global accounting standards’.

The SEC head said there
was a strong move in the US towards a principles-based approach to accounting
and regulation.

‘The US Congress has asked the SEC to examine principles-based accounting, as
a possible remedy to stopping what happened in Enron, where there was adherence
to strict particular rules but there was still a massive fraud,’ said Cox.

Cox
was guarded when asked about London’s AIM market, which has come in for
criticism from a number of high-profile US business leaders, who have said it is
too risky and lightly regulated.

‘We have adopted a different model (to AIM) in the US,’ said Cox. ‘There are
a number of factors that have to be assessed and this cannot be done in
isolation.’

Further reading:

Read the details of the agreement
here

Boyle rebuffs calls for EU regulation

FRC calls for audit profitability disclosure

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