Speaking at the Brooklyn Law School in New York City, US Securities and Exchange Commission (SEC) commissioner Kara Stein said the IFRS versus US GAAP debate should move on, however her solution looks a lot like convergence between the two accounting systems.
Stein devoted part of her speech on international cooperation in the wake of the global financial crisis and called for worldwide collaboration on data aggregation and disclosure and concluded with some remarks on the now ageless debate of IFRS and US GAAP convergence.
She stated that there was an undeniable appeal to a single set of globally recognized, high-quality accounting standards.
However she then said: "I am not convinced of a need to abandon U.S. GAAP in favour of IFRS. That is not to say that US GAAP is perfect. Nor is IFRS perfect. I’m also not convinced that providing financial statements in two different sets of accounting standards would be beneficial for either investors or issuers."
Therefore Stein believes the debate should move on. "In practice and in reality, accounting standards may vary between jurisdictions due to legal and cultural factors, as well as differences in perspective," she said.
Stein argued that rather than debate the winner between both sets of standards the profession and financial community should be thinking anew what kind of accounting regime they want going forward.
"We should be looking, on a globally coordinated basis, at the real needs of investors and issuers in the 21st century and re-imagining our accounting regimes to better serve them," she concluded. "We can adopt the best of what we have here in US GAAP, in IFRS, and the best of the new thinking out there."
Some might argue that keeping the best of the different accounting systems on a globally coordinated basis is a first step towards a sorte of convergence.
In her speech, Commissioner Stein was expressing her own views and they do not necessarily reflect those of the US SEC, her fellow commissioners, or the staff of the commission.