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Top Obama Advisers Clash on Global Accounting Standards
Friday, January 16, 2009

Paul Volcker, a former chairman of the Federal Reserve Board under Presidents Jimmy Carter and Ronald Reagan and now the chairman of Obama's Economic Recovery Advisory Board said, "I do think we ought to be working toward international accounting standards and have them standard around the world under the general aegis of the International Accounting Standards Board, and there's been a lot of progress in that direction."

Even as Volcker was pushing IFRS, however, Mary Schapiro, Obama's nominee for chairman of the Securities and Exchange Commission was advocating a go-slow approach on implementing the global standards in the United States. Schapiro, who heads the Financial Industry Regulatory Authority, told the Senate Banking Committee during her confirmation hearing today that she plans to back off of current SEC Chairman Christopher Cox's plans proposed roadmap for converting U.S. companies to international financial reporting standards. "I will not be bound by the existing roadmap that's out for public comment," she said.

Schapiro said she has concerns about the pace of the timeline, the independence of IASB, and the quality of the standards themselves. Considered more principles-based than U.S. generally accepted accounting principles, IFRS are not as detailed and give more room for interpretation, she said.

She is also worried about the cost use companies might incur in making the conversion, considering that the SEC estimates it will cost as high as $32 million for each of the largest of companies to adopt IFRS.

Ref: Cfo.com

Labels: accounting