SEC staff comments at AICPA National Conference

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07 Dec 2010

The United States Securities and Exchange Commission (SEC) has published transcripts of speeches made by its staff at a recent AICPA National Conference on current SEC and PCAOB Developments.

Mary L. Schapiro (SEC Chairman) focused on the role accountants have in restoring trust in capital markets, including comment on international convergence of auditing and accounting standards. Deloitte observers reported that Ms. Schapiro indicated in the Q&A session that the SEC is not working towards a 'hard' deadline of June 2011 in making its decision but expects to make a decision sometime in 2011 on whether or not to adopt IFRS in the United States. Ms. Shapiro further indicated that while comments from U.S. constituents have not expressed universal support for IFRS, they did almost unanimously comment requesting that sufficient time be given U.S. companies if IFRS is adopted. Ms. Shapiro stated it is likely at least a four-year preparation period will be permitted but remains a decision point for the Commission. An extract from the published text of her speech is reproduced below:

"... we are focusing on accounting standards and convergence. Because, investors should be able to make accurate comparisons and judgments regardless of an entity's line of business, ownership status or corporate domicile.

And so, the SEC continues to monitor the progress being made by the FASB and the IASB on the convergence of international accounting standards. As expected, the path towards convergence has proved steep and winding at times. But both Boards have responded to the challenges...

I am pleased with the progress to date and remain optimistic about achieving a convergence that benefits investors in the U.S. and around the world."

Brian T. Croteau (Deputy Chief Accountant, Office of the Chief Accountant) discussed the international convergence of auditing standards, noting:

"... I think we can and should think about convergence of auditing standards differently than convergence of accounting standards in that incremental requirements added by one standard setter do not necessarily preclude proper application of other standards or necessitate a conclusion that they are not 'converged' in the same way that accounting standards may lack convergence. For example, often an auditor can perform additional procedures in one set of standards without affecting the ability to have complied with the standards of another standard setter... On the other hand, when accounting standards lack convergence and the application results in differences in recognition or measurement, complying with two sets of standards simultaneously simply may not be a possibility and users end up receiving different financial reporting information. "

Lisa D. Watson (Professional Accounting Fellow) also spoke on accounting for foreclosed real estate involving loan participations and derecognition for transfers of businesses not in legal entities.

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