audit bodies have called for the US Securities and Exchange
Commission (SEC) to set a concrete date for IFRS adoption in the US
as soon as possible.
They have warned there is no incentive for
companies to prepare for IFRS until there is certainty, and that a
2011 decision will not leave enough time for a 2014 adoption.
The SEC is considering a draft road map for
IFRS adoption. Comments were due by 20 April. The proposed road map
states that a decision will not be made until 2011. If the SEC
decides then to proceed with adoption, there will be a staged
transition starting from 2014 for large accelerated filers.
No incentive
The American Institute of Certified
Public Accountants (AICPA), Center for Audit Quality (CAQ) and
Institute of Management Accountants (IMA) warned in comment letters
that the US financial reporting system will only begin to take
substantive steps to prepare for IFRS once a mandatory date is
set.
“Public companies will be hesitant to commit
resources toward adopting IFRS prior to having certainty around the
related requirements,” the CAQ wrote.
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By GlobalDataThe IMA said the SEC should make early
adoption of IFRS more appealing.
“Right now we don’t believe it is attractive
for companies,” president and chief executive Jeffrey Thomson
said.
The organisations also warned that a 2011
decision will not provide enough time for companies to adopt IFRS
by 2014. Large accelerated filers would have one year or less to
make the transition because they would need audited IFRS statements
for the years ending 2012, 2013 and 2014.
AICPA chief executive Barry Melancon said that
if the SEC wants convergence by 2014, the decision needs to be made
in 2010. If they make the decision in 2011 then 2015 or later is a
reasonable date for convergence.
The organisations said the funding and
governance of the IASB is an important issue to be resolved before
a move to IFRS. The AICPA suggested the SEC use part of the current
levy on US public companies for accounting standard-setting as a
permanent funding source for the IASB.
