Obama and Schapiro: Second Thoughts About IFRS Convergence

Incoming SEC Chairperson Mary Scharipo recently wrote Senator Carl Levin (D-MI) about sizable concerns that she had with International Financial Reporting Standards. Scharipo did not want financial reporting standards to beocme a "race for the bottom" and felt that the IASB (International Accounting Standards Board) was not up to being a sufficiently vigorous investor watchdog and that IASB at present did not meet the required high levels of transparency and disclosure. IASB's Mark Bynum response--let's talk. Small public companies may be concerned that Sharipo saw no need for relief from Section 404 requirements of Sarbanes-Oxley and intended to keep recent fair value rules but also indicated that she wishes to maintain the FASB's present place in accounting standard-setting without Congressional interference.

Quite a mouthful from the new SEC sheriff. I certainly see benefits in at least slowing the move to IFRS from the present 2014 date. The small company 404 relief has a valid case in either direction. On fair value, there are enough cost vs. benefit questions in my mind to give small and private companies a one-year delay to see some actual cost vs. benefit comparisions.