The Chartered Financial Analyst Institute (CFA
Institute) supports an endorsement-based approach of incorporating
IFRS into the US financial reporting system.
The institute’s view comes in response to a
recent US Securities and Exchange Commission (SEC) work plan that
explores the endorsement model, as well as other alternatives such
as the convergence and ‘condorsement’ approaches.
“An endorsement-based incorporation approach
would permit the US to retain its sovereign right to set accounting
standards in the US, which may work to protect investor interests,”
a comment letter from the institute said.
The CFA Institute also supported a
standard-by-standard review process and expressed its preference
for a single adoption date for all the standards once they have
been reviewed. They acknowledged that this process will “create
initial discontinuity” but will be “preferable to a period of
continuous discontinuity”.
The institute also emphasised its view that
the SEC should wait until it completes its work plan and “not be
beholden to a 2011 decision date”.
The CFA Institute is a global, not-for-profit
professional association of over 107,200 investment professionals
in 137 countries, many of whom hold the CFA designation.
