THE INTERNATIONAL ACCOUNTING Standards Board has sent in the big guns to argue the importance of US convergence with international financial reporting standards.
Chairman Hans Hoogervorst and trustee Harvey Goldschmid were dispatched to the American Institute of CPAs (AICPA) and IFRS Foundation conference in Boston yesterday, where both argued powerfully for convergence.
Hoogervorst (pictured) attempted to answer US stakeholders’ major concerns, including the quality, application and cost of global standards.
Diplomatically, he dismissed the argument that IFRS are lower quality than US GAAP, saying: “I am not convinced by the arguments that one set of standards is clearly superior to the other … so I could not imagine that concerns about quality would play a major role in the decision to adopt IFRS.”
On cost and application, he reassured the US that regulator the SEC “will remain in full control of enforcement”, and said a long transitional period plus the country’s already “substantial IFRS competence” means costs should not be too onerous.
Harvey Goldschmid, former SEC commissioner and law professor at Columbia Universty, might hold even more clout among his fellow countrymen.
He said this is a “critical moment” for convergence and wheeled out supporting statements from well-respected backers like Ford Motor.
Calling “unambiguous SEC commitment to incorporation” “essential”, he said it would create certainty and incentives for large public companies, investments analysts, firms and business schools to prepare for implementation in the near future.
Much of his speech was spent assuring the US that its interests would be respected, saying due process, IASB governance and US watchdogs would play a part in protecting the SEC’s “ultimate authority … to prescribe accounting standards”.
The conference concludes tomorrow and other topics for discussion include the IASB’s progress and future work plan and XBRL for IFRS.
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