• A framework to permit varying degrees of reliance on a firm's home country system of inspections, based on a sliding scale: the more independent and robust a home country system, the higher the reliance on that system. This framework also would involve the PCAOB in inspecting, on behalf of a non-US regulatory agency, US firms that audit or play a substantial role in the audit of public companies in the non-US jurisdiction.
• A modification to the PCAOB's registration form to permit, where applicable, the inclusion of certain information about a non-US firm's home country oversight system, to facilitate coordination between the PCAOB and non-US oversight systems.
• A 90-day extension of the Board's deadline for non-U.S. firm registration, which will give non-US firms a reasonable amount of time to understand and prepare for registration.

International Convergence. This needs to be a continuing and constant priority, both in terms of eliminating specific 'narrow' differences between U.S. GAAP and IFRS through 'short-term' convergence projects and by aligning our future agendas on major projects as best we can. I believe that we can do this in a way that is consistent with the recommendation in the SEC report on principles based standards that over time we redo some of the more 'rulesbased' standards in current U.S. GAAP. In that regard, the SEC report cites stock compensation, leasing, derivatives, and derecognition of financial assets as examples of such rules-based standards. With regard to stock compensation, both we and the IASB are, of course, currently working on that subject. Leasing (or perhaps the broader subject of executory contracts) is a topic I would favor us taking on as a joint project in the next year or so. I would also favor us revisiting Statements 133 and 140 and all the related pronouncements. However, a more principles-based or objectives-oriented approach in these areas would, in my view, imply moving to a full fair value model for financial instruments. While I personally favor such a move, its timing requires that we address and satisfactorily resolve important measurement and display issues and reliability concerns. Because this is a pervasive and controversial area, I think it would be important that we address it jointly with the IASB. But right now I do not believe that the IASB would be prepared to put this on its current agenda because of all the other things it needs to get done in the near term to achieve a 'stable platform' for 2005, including getting its existing financial instruments standards (IAS 32/39) improved and adopted by the European Commission.

As multinational companies operate in many markets, the accounting standards need to be consistent. The United States is one of the few major exchanges in the world that does not already accept International Financial Reporting Standards. Convergence should not only be the goal for pronouncements already issued, but should continue to be a factor for consideration in the current development of new GAAP.