IFRS proposal
A slight majority of the US
business community is at loggerheads with the profession over a
proposal to allow US and foreign listed companies to file financial
statements prepared according to international standards without
reconciling to US GAAP.
In a Grant Thornton US study, more than one-half of chief
financial officers and senior comptrollers surveyed were opposed to
listed companies using IFRS to report their financial results
without reconciliation requirements.
This contrasts with recommendations by the American Institute of
Certified Public Accountants (AICPA), the largest professional
accountancy body in the world, in which US and foreign Securities
and Exchange Commission (SEC)-listed companies should be allowed to
use IFRS without the often burdensome reconciliation requirements
with US GAAP. This month, the AICPA advocated these views to a US
Senate panel.
Charles Landes, vice-president for professional standards and
services at the professional body, commented: “The AICPA supports
the goal of a single set of high-quality, comprehensive accounting
standards to be used by public companies in the preparation of
transparent and comparable financial reports throughout the world.
The debate or question should no longer be whether we move to
convergence of high quality accounting standards, but how soon we
can accomplish convergence.”
The SEC is weighing whether to allow US companies to report
financial results using international standards rather than US
GAAP. It follows an earlier proposal by the regulator that would
allow foreign companies filing with the commission to use IFRS
without reconciling to US GAAP. It appears the wider business
community is torn between retaining the current system or moving
towards a reporting system whereby companies can choose between
IFRS or US GAAP.
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By GlobalDataThe Grant Thornton survey revealed that 56 percent of senior
financial executives believe foreign firms should not be allowed to
file financial statements prepared according to IFRS without
reconciliation to US GAAP. A similar number also feel that US firms
should not be able to use IFRS when filing financial statements
with the SEC without the same requirements. In addition, only 43
percent of respondents believe that SMEs should use
IFRS.
