SEC: Where We Stand on IFRS Convergence

SEC Chief Acccountant Jim Kroeker recently announced the first progress report on incorporation of International Financial Accounting Standards into American standards. Six key areas were addressed: sufficient development of IFRS for use in American reporting; maintaining independence under IFRS; investor education regarding IFRS; determining the impact on accounting regulation that IFRS would create; the separate impacts of IFRS on small and large businesses, including information systems, governance and litigation and finally the impact on human capital. Kroeker believes that the SEC is making good progress, but expressed some concern that federal regulatory bodies, including those overseeing the financial industry, might have difficulties meeting present targets.

I still have misgivings about rushing into IFRS, but realize that the U. S. is to adopt international GAAP that the work described here is necessary. Hopefully, a full plan, including a framework for accounting standards for small and privately-held businesses, will be implemented before committing to IFRS.