09 August 2009

SEC, FASB criticised to commit to IFRS

“If the SEC comes out and says we're never going to accept IFRS, then there will obviously be repercussions worldwide,” Sir David Tweedie, Chairman of IASB, said. “It will be impossible to continue this after 2011”.

IASB Chairman Sir David Tweedie issued his warning during an August 4 address to the American Accounting Association's annual meeting in New York. It came a day after a senior SEC official said there is growing concern at the agency about the proliferating regional interpretations of IFRS.

 

“If the SEC comes out and says we're never going to accept IFRS, then there will obviously be repercussions worldwide,” Sir David said. “Then the argument will be: why should you get involved with them? And that's going to be difficult for us to handle.”

 

If SEC and FASB officials fail to make a clear commitment to the international rules in the next two years, more than U.S. adoption of IFRS will be at stake; the convergence of U.S. GAAP with IFRS will essentially stop before it's ever completed.

 

“It will be impossible to continue this after 2011,” said Sir David, referring to the joint effort in the FASB-IASB Memorandum of Understanding.

 

The IASB chief's warning is a reaction to the mounting political pressure on both boards and the festering resentment toward the U.S. in many of the 117 countries that have adopted IFRS.

 

“We get a lot of criticism of the favored nation status accorded the U.S.,” said Sir David, referring to the four of 16 seats on the IASB reserved for U.S. members, the five of 22 trustee posts the U.S. has on the IASB's parent, the International Accounting Standards Committee Foundation, and the presence of SEC Chairman Mary Schapiro as one of five members of the IASCF Monitoring Board.

 

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