SEC Adopts Wait & Watch Mode with Regard to IFRS
The officials at the SEC (Securities and Exchange Commission) have adopted a wait and watch approach towards incorporating IFRS into the United States’ finance system, even though a lot of foreign entities are filing their finance related reports with the Securities and Exchange Commission using International Financial Reporting Standards.
At a discussion held at the Financial Executives International’s 31st Annual Current Financial Reporting Issues conference, some of the officials revealed the status of the IFRS in America but also stated that they were essentially their own views and had nothing to do with SEC’s viewpoint.
Acting chief accountant at SEC, Paul Beswick, analyzed the SEC’s staff related report results, which primarily focuses on IFRS, in addition to the another report that pointed towards several problems/issues with the International Financial Reporting Standards. Till now the commissioners from SEC haven’t taken any decision regarding adopting IFRS.
Beswick stated that at the time of thinking regarding adequate development of the International Financial Reporting Standard, few of the area where the staff members focused on included the IFRS comprehensiveness, enforceability and auditability as well as comparing ability among different jurisdictions. Beswick further clarified that both the investors and prepares have informed the SEC that given that the information is not worthy of comparison across different jurisdictions, it does not make any sense to achieve a single set of accounting standards.
He further noted that a lot of people were taken aback when they noticed that the report did not include any recommendation for the commission. Beswick also mentioned that it must be understood that the basic intention of the work related plan was to gather more information in order to help the commission in taking a well informed decision. He also clarified that the staff members have acknowledged the fact that looking at International Accounting Standard Board directly would come across as a huge challenge in the United States.
The staff members of the SEC also analyzed how burdening converting from one standard to another would be. Some of the drawbacks that have been pointed out in the report include fostering consistency in enforcement and application, fund mechanism for the IASB and maintaining United States’ influence in the procedure for setting standard.