Wednesday, January 16, 2008

Tides of Change - Retooling of Accounting Standards

The Global Public Policy Symposium IV was recently held in NY, with representation and discussion among the top international auditing firms.

With the ongoing discussion around more principle-based (IFRS) accounting standards versus the more familiar rules-based (GAAP) standards in the US, many are interested - if not regularly dialed into - the discussion of adoption and the implications of domestic adoption of IFRS.

In the published white paper, "Principles-based Accounting Standards", characteristics of an effective framework are proposed. Of interest will be how well a principles-based framework can hold up in the litigious US, where obscure precedent can often trump reasonable and professional judgment.

Tides of Change - Retooling of Accounting Standards

Labels: Global Public Policy Symposium, IFRS, principle-based accounting standards

Tell us what you think. (0) comments.
Send to a friend:

Top audit firms push to use their own judgment

Auditors and corporate finance departments must be able to use professional judgment without being second-guessed if countries continue to adopt principle-based accounting standards, the chief executives of the top six global accounting networks argued in a white paper on Tuesday.

The paper, presented at a Global Public Policy Symposium in New York, urged regulators and other stakeholders to create a system where reasonable auditor judgments are accepted.

"Investors are best served when financial reports are clear and easy to understand and use," the CEOs of Deloitte Touche Tohmatsu [DLTE.UL], Ernst & Young [ERNY.UL], PricewaterhouseCoopers [PWC.UL], KPMG [KPMG.UL], Grant Thornton, and BDO Seidman wrote.

"In order to deliver on that goal, preparers and auditors must be given the space to exercise professional judgment and to feel confident that their judgment, so long as it is fundamentally sound and documented, will not be subject to second-guessing."

More than 100 countries are currently using, or plan to use International Financial Reporting Standards (IFRS), which are seen as a more principle-based accounting system. In recent months many have called for the United States to set a national plan to move to IFRS from U.S. Generally Accepted Accounting Principles, which are often viewed as more rule-based.

Top audit firms push to use their own judgment

Labels: GAAP, IFRS, professional judgement

Tell us what you think. (0) comments.
Send to a friend:

Thursday, December 13, 2007

FEI Members on Panels; FEI Committee on Corporate Reporting Comments on Concept Release

Four members of Financial Executives International (FEI), an association of senior financial executives, are among panelists appearing on the SEC’s IFRS roundtables. FEI members participating on today’s panel are Gregg L. Nelson, VP, Accounting Policy and Financial Reporting at IBM Corporation and Matthew Hilzinger, SVP and Corporate Controller, Exelon Corporation. The December 17 panel includes FEI members Mick Homan, Comptroller, Corporate Accounting, Procter & Gamble Corporation, and Margaret (Peggy) Smyth, VP and Controller, United Technologies Corporation.

Homan, Nelson and Smyth are members of FEI’s Committee on Corporate Reporting (CCR). CCR provided a comment letter to the SEC on November 15, in response to SEC’s Concept Release on whether to permit or require U.S. companies to file their financial statements with the SEC in IFRS.

CCR’s comment letter supported permitting U.S. companies the option of voluntary adoption of IFRS. If the SEC were to decide to make IFRS mandatory, CCR said in its November 15 letter that mandatory adoption by all companies could come ‘no sooner than 2012.’

“CCR strongly supports providing a choice in the near term to U.S. issuers to prepare financial statements in accordance with IFRS as published by the International Accounting Standards Board,” said the CCR letter, signed by CCR Chair Arnold C. Hanish, EVP and Chief Accounting Officer, Eli Lilly and Co.

However, CCR’s letter added, “It is important to acknowledge that the prospect of allowing U.S. companies to file on the basis of IFRS has very different implications for the broad array of U.S. companies that form the membership of FEI.”

FEI Members on Panels; FEI Committee on Corporate Reporting Comments on Concept Release

Labels: CCR, FEI, IFRS, sec

Tell us what you think. (0) comments.
Send to a friend:

Tuesday, October 23, 2007

PCAOB Urged to Take a 'Clean Sheet' Approach to Standard Setting Priorities at Oct. 17 SAG Meeting

SAG members were concerned that items on PCAOB's priorities list from prior years remain uncompleted. They also asked if the PCAOB had sufficient resources to complete their projects. Some noted the PCAOB had become a follower rather than a leader, and suggested the PCAOB try to leverage off work being done by the AICPA's Auditing Standards Board (ASB) and the International Auditing and Assurance Standards Board (IAASB) where those groups were ahead of the PCAOB on certain standards.

PCAOB Urged to Take a 'Clean Sheet' Approach to Standard Setting Priorities at Oct. 17 SAG Meeting

Labels: AICPA, ASB, FEI, IAASB, IFRS, pcaob, sarbanes oxley

Tell us what you think. (0) comments.
Send to a friend:

Monday, October 22, 2007

PCAOB Told to Plan for Global Standards

Members of the Public Company Accounting Oversight Board's advisory group are split on the question of how hard it would be for the auditing profession to adapt to International Financial Reporting Standards.

In light of a recent Securities and Exchange Commission proposal that U.S. companies should be given the choice between IFRS and U.S. generally accepted accounting principles, some PCAOB advisers worried that such a choice would overly burden accounting professors who are already strapped for resources. They also questioned whether the International Accounting Standards Board's version of IFRS is of high enough quality to meet U.S. regulators' and investors' expectations. The IASB expressed similar worries on Thursday.

The larger accounting firms, however, assured the advisory group that they have been training their staffs on using IFRS. Perhaps surprisingly, a member of the Financial Accounting Standards Board spoke in favor of a move to international standards.

PCAOB Told to Plan for Global Standards

Labels: GAAP, IFRS, pcaob, sec

Tell us what you think. (0) comments.
Send to a friend:

Wednesday, April 18, 2007

Speech By SEC Commissioner Roel C. Campos: Remarks Before The IOSCO Annual Conference

Good morning. At the outset, I'd like to thank M. Damodaran for being such an excellent host to this conference. In addition, it's definitely a pleasure to be part of such a distinguished panel, and I appreciate all of the work that Arthur Doctors van Leeuwen has done in organizing the topics for it. In any event, before I begin, I must remind you that the comments I make today are my own and do not reflect the opinions of the staff or the other Commissioners of the Securities and Exchange Commission.

Let me start by noting that in the nearly five years in which I've worked with IOSCO, I've never seen more interest with respect to the growing globalization of the securities markets and international securities regulation than in the last few months. Perhaps this is just an American perspective and that we're just late to the party, but I do sense that we may be approaching critical mass on some of these issues.

Of course, much of what I'm referring to does not directly involve audit or accounting standards, but rather concerns the fact that there has been increasing globalization of the securities markets. Most notable is the recent NYSE-Euronext merger, which I think will add significant pressures to the desire for seamless global securities trading and will likely bring requests from the combined entity to allow the sale of listed European securities in the U.S., and vice versa.

Speech By SEC Commissioner Roel C. Campos: Remarks Before The IOSCO Annual Conference

Labels: as5, GAAP, IFRS

Tell us what you think. (1) comments.
Send to a friend:

Monday, April 16, 2007

Gulf between US and international accounting standards remains

Companies from overseas that are listed in the US are still facing considerable differences between international and US accounting standards, Ernst & Young has stated.

The accounts of 130 foreign private issuers filed with SEC had more than 200 differences between the International Financial Reporting Standards (IFRS) and the US Generally Accepted Accounting Principles (GAAP), Accountancy Magazine reports.

Areas with the most substantial differences were pensions, business contributions and financial instruments.

Gulf between US and international accounting standards remains

Labels: GAAP, IFRS, sec

Tell us what you think. (0) comments.
Send to a friend: