Securities and Exchange Commission (SEC)
commissioner Kathleen Casey said US public companies must be
allowed to report under IFRS while some smaller issuers should be
given the option to use US GAAP – a strong indication the world’s
largest economy will finally embrace global accounting
standards.
At the Society of Corporate Secretaries and
Governance Professionals’ 65th Annual Conference, Casey said the US
can ill afford to be involved in global standard-setting.
“The risks of not moving forward with IFRS for
US issuers are simply too great,” she said.
“History has shown us that, in the absence of
US involvement and leadership, carve-outs and divergence by
individual nations from IFRS, as issued by the IASB, begin to
emerge.
“Additionally, a single set of high-quality
accounting standards will significantly reduce the burdens and
costs for multinational corporations of reporting their financial
results under multiple accounting systems. The commission has
already made the determination that IFRS, as issued by the IASB,
are of high quality.”
Casey points out that capital markets are
increasingly global and US private assets invested in foreign
securities were $5.47 trillion in December 2009.
She also believes some smaller filers that
have no global operations should be given the chance to opt out of
IFRS if reporting under it proves burdensome and has no
benefits.
“Providing optionality would preserve the
benefits of IFRS, ensure continued U.S. influence in the
development and preservation of IFRS, and avoid unnecessary costs
for smaller U.S. issuers,” Casey said.
The SEC is set to make a decision on whether
to adopt IFRS later this year.
