Following the recent release of the U.S. Securities and Exchange Commission's negative final staff report on the IRS Work Plan, the chairman of the International Accounting Standards Board (IASB) has urged the United States to embrace International Financial Reporting Standards (IFRS).
The hope is for IFRS to establish a global set of accounting compliance
standards that can be followed by accounting consultants
and others in the industry, regardless of the country and region where they are based.
"IFRSs have already achieved critical mass as international standards and with more than two thirds of the G20 now on board, the momentum behind them becoming global accounting standards is irreversible," said IASB chairman Hans Hoogervorst in a recent statement
However, the U.S. is defying the transition from the current framework - Generally Accepted Accounting Principles - to IFRS. As Accounting Today
notes, Hoogervorst's statement "seemed to imply that the U.S. could lose its influence over IFRS if it continues to resist."
Michel Prada, chairman of the board of trustees of the IFRS Foundation, noted that many of the challenges the U.S. has balked at were successfully addressed by other countries. Prada criticized the fact that the SEC report was lacking a recommended action plan, which he said would be highly advisable to draw up "given the achievements of the convergence program inspired by repeated calls of the G20 for global accounting standards."
Nigel Sleigh-Johnson, head of the reporting faculty at the Institute of Chartered Accountants in England and Wales, said he was not surprised by the lack of IFRS adoption recommendations in the SEC staff report. He added that although the U.S. still has some reservations about the accounting standards, this "should not be taken as any reflection on the suitability of IFRS reporting for other markets."
The Center for Audit Quality is also advocating for the U.S. adoption of IFRS. In a recent statement
, its executive director, Cindy Fornelli, said the organization "remains supportive" of the adoption of a single set of global accounting standards and named IFRS as being "best positioned" to fill this role. In the event of the U.S. adopting IFRS, companies that have simple accounting software
in place will enjoy a much smoother transition due to the automated nature of the technology.