Herdman, raised the possibility that the SEC will accept financial statements from foreign registrants prepared on the basis of IFRS without reconciliation to US GAAP:
The prospect that 7,000 listed companies in the European Union member states will be satisfying their listing requirements by disseminating financial statements prepared under IAS is one that we at the SEC must give serious consideration to vis à vis our filing requirements. The following matters will influence whether the SEC will arrive at the result you all, I am sure, hope for - that we would accept those filings in the U.S.
- The standards themselves, through the IASB's existing projects on improvements, etc., as well as what I hope can be achieved through cooperative efforts between the IASB and the FASB, achieve sufficient short-term convergence.
- Infrastructure is sufficiently developed so that the standards are interpreted and applied in the manner intended with sufficient consistency across countries and firms. IFRIC alone is not enough, I believe, to accomplish that goal.
- Training of thousands of accountants and auditors who have not previously worked with IAS, keeping in mind the standards will be moving targets.
- Continued progress is made in the areas of regulatory oversight of the auditing profession and in CESR's determination of appropriate regulation of filing and other processes.
Mr. Herdman also offered his thoughts on globalisation of the world's capital markets, 'convergence' of accounting standards, and accounting reforms in the United States. Click for Full Text of Mr. Herdman's Speech.