Accounting News

Tuesday, May 15, 2012
Will SEC Adopt IFRS

The longer the Securities Exchange Commission (SEC) goes without announcing a decision on International Financial Reporting Standards (IFRS) the louder the questions become. Timothy Geithner, the Treasury Secretary has been arguing for adoption of the rules but it SEC chairwoman Mary Schapiro has made no announcement.

There has been a push for international standards to make it easier for regulators and investors. The hope is that it would have been approved by the end of last year. But they delayed a decision until the beginning of 2012. Now that deadline has also passed. The speculation is that chairwoman Schapiro is just biding her time until the presidential election this fall. She said she would not serve another term and can leave the decision to her successor.

The counterargument has been that the new standards are of a lower quality than the generally accepted accounting principles (GAAP) currently in use.  The Financial Accounting Standards Board (FASB) would like a slower adoption rate.

My biggest problem with the SEC is making no decision at all. They are paid by taxpayers to make decisions. If they can't choose anything they should resign immediately and hand the job over to someone who can. It is the uncertainty that is most damaging to the markets. Waiting another six months for a new administration to start the process over is an embarrassment to the SEC, chairwoman Schapiro, and ultimately the President.

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