United States May Have to Vacate its Seat on Global Accounting Body
European Union’s Executive Stefaan De Rynck has categorically stated that if the U.S. continues to delay its decision of adopting IFRS accounting rules then it will very soon have to vacate its seat on a global accounting body.
The rules that have been formulated by London’s International Accounting Standards Board are currently being used in over hundred countries. The IASB committee on which the United States sits is at present monitoring these rules.
Rynck also mentioned that in the absence of clarity of vision from United States is giving rise to several uncertainties and further restricting the IFRS from becoming a global accounting standard.
IASB had also criticized the United States Securities and Exchange Commission and stated that there was absolutely no support from the board when it came to matters associated with adoption of IFRS. SEC has also not created any time period within which they would be taking any decision on IFRS.
Mary Schapiro, SEC’s chairman is also one of the members of the monitoring board of IASB which is an important committee of a couple of regulators who have immense control over IASB’s functions and work. In fact, even Japan’s Financial Services Agency’s Ryutaro Hatanaka also sits on the board. On the other hand, even Japan is yet to take a decision on the usage of IFRS.
When questioned on the above matter IASB refused to comment on the issue.
However, efforts related to expanding the Monitoring Board and including some more emerging economies and market are still on. Efforts are also being put to rope in China and IASB has made it clear that membership will only be given if they agree to follow the IFRS accounting standard.
At present the United States has only allowed as many as five hundred foreign firms that have been listed on their markets to utilize IFRS for the purpose of filing their statements to the Securities and Exchange Commission whereas only around thirty Japanese companies are using the global accounting rules. European Union, U.S. and rest of the G20 group’s members have taken the pledge to create one set of global accounting rules by the mid of 2013.