EY IFRSComments

There is little question that ifrs will be those

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: nd companies alike. There is little question that IFRS will be those standards. However, somewhat surprisingly, there was “violent agreement” (as one of the panelists commented) among the majority of panelists that US issuers ultimately should be required to adopt IFRS, rather than given the option to convert. Only a limited number of panelists questioned whether IFRS should ultimately replace US GAAP. Panelists generally agreed that the SEC should specify a date in the future at which US companies would be required to convert, rather than provide an open-ended, perpetual option. While the December roundtables also touched on a number of related topics, including a potential conversion timeline, the effect on US market competitiveness and investor readiness for a switch, no issues were identified that ultimately dissuaded the panelists from their support for IFRS. As 2007 came to a close, many observers expected to see accelerated SEC rulemaking activity regarding the use of IFRS by US domestic companies. Although the SEC has not issued a rule proposal and has not publicly indicated whether, and if so when, a rule proposal may be forthcoming, it is clear that the discussion of IFRS for US domestic issuers is still firmly on its agenda for 2008. In a recent speech1, SEC Chairman Christopher Cox stated, “This year, the Commission will consider how we will map the future for US firms and International Financial Reporting Standards.” Some observers believe that the SEC’s next step likely will take the form of a “roadmap” that addresses steps that must be initiated before US companies are permitted — or required — to prepare their financial statements in accordance with IFRS. Many, including Ernst & Young, believe that the SEC should go beyond the possibility of optional conversion to IFRS and declare that it will require adoption of IFRS as of a specified date in the future. Doing so would provide impetus for needed changes to the financial reporting, regulatory and legal systems that we believe are necessary in order to successfully implement IFRS in the US, while sending a clear signal to the rest of the world that demonstrates trust in the IFRS standard-setting process. The eventual adoption of IFRS in the US is becoming increasingly more likely. The message from the SEC’s December roundtables is that investors, preparers and auditors all strongly support a move to a single set of accounting standards, and that those standards should be IFRS. Although all indications are that the US will continue to move toward eventual adoption of IFRS, we expect significantly more dialogue on this topic over the next several months as the SEC considers all the ramifications of such an extensive change on US and global capital markets. As IFRS issues develop in the US, it is important for audit committees to broaden their understanding of IFRS and continue to monitor and stay abreast of developments at the SEC, IASB and US Financial Accounting Standards Board (FASB). Like everyone else interested in the future of financial reporting, we will continue to pay close attention to unfolding events, including actions of the SEC, a...
View Full Document

This note was uploaded on 11/21/2009 for the course ACC acc 310 taught by Professor Mlot during the Fall '09 term at N.C. State.

Ask a homework question - tutors are online