Investors at the US Securities and Exchange Commission’s (SEC)
roundtable favour “condorsement” as the approach to adopting IFRS,
according to blog
The Summa.
At a round table that discussed investor’s
understanding and knowledge of IFRS, smaller public companies and
the regulatory environment investors also said there is a big risk
switching over to the IFRS as they believe the International
Accounting Standards Board does not have the structure, stability
and interpretative guidance US investors require.
From an SME perspective, participants
including accounting firm Plante & Moran do not see the benefit
of switching to IFRS. If it was to happen, half favoured a slower
convergence approach while the rest favoured a “big bang”
approach.
The National Association of State Boards of
Accountancy director at large and Ehrhardt Keefe Steiner &
Hottman audit partner Gaylen Hansen, who took part in the
regulatory environment panel, expressed the most vocal opposition
to adopting IFRS.
Hansen argued that if IFRS is not superior to
US GAAP then why should the US adopt?
He then raised a concern that there are still
120 countries who have not adopted IFRS and thinks the current plan
put forward by the SEC may cause confusion and loss of investor
confidence.
Hansen added that it is “unfair” to move to
IFRS when the country is struggling economically. In his final
remarks he called for the SEC to reconsider the proposal as he
believes it is not in the US’s national interest.
In a recent speech, SEC commissioner Kathleen
Casey publicly backed a US move to IFRS saying “the risks of not
moving forward with IFRS for US issuers are simply too great”.
The SEC is set to make a decision on whether
to adopt IFRS later this year and the roundtable is part of this
process.
