President of the Institute of Chartered Accountants of Scotland (ICAS) David Tweedie has said the US should not delay its decision on IFRS adoption anymore.
The former chairman of the International Accounting Standards Board (IASB) was speaking during a joint ICAS and American Institute of Certified Public Accountants (AICPA) event – Shaping the Future; Lessons from Accounting Standards Leaders – which also included among its panellists former chairman of the US Financial Accounting Standards Board (FASB) Bob Herz and former chairman of the Canadian Accounting Standards Board (AcSB) Paul Cherry.
Tweedie warned further delays would have a negative influence on the decision of other countries and it would also weaken the US’s ability to impact the shaping of IFRSs.
“The US has the key to international standards in its hands. The world is waiting. And waiting and waiting,” Tweedie said.
He warned that countries such as Japan, India and China are now hesitating with their commitment to IFRS after watching the SEC repeatedly delay its decision.
Tweedie then said if a decision was delayed beyond the US elections it could lead to an unravelling of convergence and stressed how, had it not been for the crisis, convergence would have already been accomplished.
Cherry followed stressing how Canada’s 2011 decision to adopt IFRS rather than sticking with US GAAP has proven to be the right one.
“There were some speed bumps but the world did not come to an end. We’re still out and about,” Cherry said.
Herz, who was later challenged as to whether he could have done more to achieve convergence in his time as FASB chairman, said he thought he had taken it the right way.
“It is up to the SEC and the political process, but we need clarity on where the US is going,” Herz added.
He noted that it is likely the SEC will opt for “endorsement,” also known as “condorsement,” but questioned whether the existing IFRS standards would be incorporated.
Among the topics covered was IFRS for SMEs as Tweedie defended the notion that there had been a lack of take up of the standard. He argued it is now used by 70 million companies, mostly in smaller countries, and has been a “howling success”.
On whether political pressure on standard setters was strong all three agreed it was.
“Politicians drove me nuts,” Tweedie said jokingly.
Herz remarked: “some people take the view that politicians should be kept out of standard-setting but that’s not the real world.”
Tweedie concluded the session saying that standard setters have to be careful not to end up being the “search engine profession”.
“We have to go by principles not rules.”