Comment: USA SEC chair White passes IFRS hot potato to successor12 January 2017 by Vincent Huck
USA SEC chair Mary Jo White has issued a public statement calling globally accepted accounting standards a USA imperative.
“The Commission has long promoted high-quality, globally accepted accounting standards, formally advocating them for almost 30 years, including in 2010, when the Commission last reaffirmed the importance of pursuing such standards to further our mission. While there has been no formal action by the Commission since, I have strongly urged engagement on this issue by the Commission, including on whether to further incorporate International Financial Reporting Standards (IFRS) into the U.S. financial reporting system – an issue identified for further consideration in 2010,” White’s statement reads, begging the question of why nothing has happened since 2010.
White’s statement continues by making the case for globally accepted accounting standards for the USA market both for investors and companies.
“In light of these global realities, fully understanding IFRS, including similarities and differences between USA GAAP and IFRS, is of central importance to USA investors and companies. So, too, is ensuring that these standards, as well as USA GAAP, are of the highest quality,” the statement reads. “While USA constituents have advised us that they do not support a move to, or an option to use, IFRS for financial reporting by USA companies at this time, this does not lessen the importance of their engagement on IFRS or in the broader work to further enhance globally accepted standards.”
This according to White should be done through greater convergence between the FASB and IASB accounting standards.
“While it is now clear that U.S. GAAP and IFRS will continue to coexist in our public capital markets for the foreseeable future, it is just as clear that the efforts to enhance the respective standards and to reduce differences between them should continue,” she wrote before concluding: “I strongly urge the next Chair and Commission to build on our past efforts and give the goal of high quality globally accepted accounting standards the focus and support this critical issue deserves.”
Let’s now see if the new chair of the USA SEC, Jay Clayton, is as skilful in committing to not commit.
White’s full statement is accessible here