The SEC's action was in response to section 108 of the Sarbanes-Oxley Act of 2002, which, among other things, specifies the criteria that must be met in order for an accounting standard setter's work product to be recognised as generally accepted by the Commission. In its new policy statement, the Commission noted:
In order for US accounting standards to remain relevant and to continue to improve, however, the Commission expects the FASB to consider, in adopting accounting principles, the extent to which international convergence on high quality accounting standards is necessary or appropriate in the public interest and for the protection of investors, including consideration of moving towards greater reliance on principles-based accounting standards whenever it is reasonable to do so.... We expect that during its deliberations of an accounting issue the FASB will consider, among other things, international accounting standards addressing that issue.
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Click for full text of the
SEC Policy Statement.