The question of whether the US should adopt global accounting standards is back on the front burner: The Securities and Exchange Commission has announced plans to review its latest thinking on the subject at a meeting tomorrow.
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Resources on forthcoming sea-change in global business – US switch to international accounting rules
You may want to keep in mind three resources at Pace University, which is in the forefront of developing and spreading information about the likely US switch to international accounting rules. On February 24, the US Securities and Exchange Commission is expected to discuss a revised timetable for deciding whether and when US companies will adopt IFRS, the International Financial Reporting Standards, now in full use in 70 countries and in at least partial use in 120, including the European Common Market nations, Russia, India, China, Japan and most of Latin America. The US uses GAAP, or Generally Accepted Accounting Principles.
1. Tom Jones. One of the world’s most respected experts on the transition, its corporate and government politics, and results so far in places like South Korea, Australia and the UK. Available on background and on the record from his new vantage point at Pace University. He has unique knowledge of the two systems and their players — from 2001 until 2009 he was Vice Chairman of the International Accounting Standards Board, which developed the new international rules, and before that he was a trustee and Vice chairman of the Financial Accounting Foundation, which oversees the US standards. A former high-level Citicorp official, he has consulted all over the world about this including to the New York State bar association and to French rule makers (in French).
Jones now directs the Center for the Study of International Accounting Standards and is Distinguished Professor in the Practice of International Accounting at Pace’s Lubin School of Business.
2. Annual conference. The fourth annual conference on the transition to IFRS will be held in New York City Tuesday, April 27. This Lubin event has become a leading global source of updates and information for senior officials in government, business, and global accounting. http://www.pace.edu/pace/lubin/news-events/lubin-forum-on-contemporary-accounting-issues/. Transcripts of the most recent conference are in a special section of the July, 2009 “CPA Journal” at http://viewer.zmags.com/publication/a8fe9ceb#/a8fe9ceb/1
3. Teaching. While many US campuses offer no instruction in IFRS, Jones is accelerating the presentations and course modules that have made Pace’s Lubin School a pioneer. Visits to classes are available on request.
Investor impact: “Race to the bottom”
Jones fears that the longer the world retains two systems, the more preparers will “pick the one that’s easiest, creating a race to the bottom that won’t be beneficial for investors.”
But he thinks a transition now is “inevitable.” Last year almost 50 countries committed to making the change by 2011, including international powers like Japan, India, and Mexico. In the US, multinationals already state their results two ways and a few are making intensive preparations.