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.