US SEC commissioner discusses global accounting standards
27 Mar 2015
Kara Stein, a Commissioner of the US Securities and Exchange Commission (SEC), gave her opinion on the future of IFRSs in the United States during a speech at the Brooklyn Law School in New York City. Ms Stein discussed international cooperation in the wake of the global financial crisis and called for worldwide collaboration on data aggregation and disclosure. She then discussed IFRS adoption in the United States, noting:
I am not convinced of a need to abandon U.S. GAAP in favor of IFRS. That is not to say that U.S. 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. With complexity in both businesses and products on the rise, it seems that presenting information in a dueling set of financial reporting standards does not really aid in understanding.
To be frank, this debate between dueling standards needs to move on. Neither regime worked ideally in the financial crisis, and neither may serve investors well in today’s post-financial crisis, technologically disrupted, and data-driven world. In practice and in reality, accounting standards may vary between jurisdictions due to legal and cultural factors, as well as differences in perspective. Remember, IFRS is not consistently implemented around the world.
Ms Stein acknowledged that convergence “makes sense” but suggested “reimagining” accounting regimes to use technology and globalisation to “minimize differences and maximize global investment and access to capital.”
The full transcript of Ms Stein’s speech is available on the SEC's website.
