Mind the GAAP
For several weeks now Accountancy Age has been warning that attempts by US regulators to crack down on corporate wrongdoing on Wall Street spells trouble for the rest of the world.
We reported last month that the UK ambassador to Washington had stepped into the row surrounding the move to turn the SEC into a global audit and accounting regulator.
And as the drive to end corporate scandals on Wall St intensifies, it’s worrying both in principle and practice.
It could mean that CEOs and FDs of UK companies with US securities have to follow their US equivalents by ‘swearing’ that their accounts are accurate.
This gives the SEC considerable – and worrying – extra-territorial power.
With negotiations over US corporate compliance with international accounting standards unresolved, it could weaken UK and European arguments into winning the argument that US GAAP is not always the best – as Enron and Worldcom have amply demonstrated.