State Board Report
The Final Staff Report on "Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers" from the Office of the Chief Accountant of the U.S. Securities and Exchange Commission was released on July 13, 2012 and it does not contain a recommendation to the SEC on whether to incorporate IFRS in U.S. reporting standards. What the paper does do is summarize what the staff learned in the areas covered by their Work Plan (published in February 2010) regarding the potential impact of any incorporation of IFRS into the financial report system for U.S. issuers.
Among the Staff 's findings highlighted in the paper were:
The Staff observed: "…there is substantial support for exploring other methods of incorporating IFRS that demonstrate the U.S. commitment to the objectives of a single set of highquality, globally accepted accounting standards while addressing some of the aforementioned concerns."
In two sections of the Staff 's paper, NASBA's comment letters to the SEC on the 2008 IFRS Roadmap are quoted. One reference stated: "Commenters on the 2008 Roadmap stated that IFRS allows for increased flexibility as compared to U.S. GAAP, which may result in standards that are less enforceable – a factor which would not be in the public interest" (page 27 of the new Staff report). The second reference, at the very end of the report on page 126, stated: "[some] firms would determine that they were not able to maintain competence in two standards (U.S. GAAP and IFRS) and would elect to serve only clients that used standards for non-issuers, which would result in further concentration of auditing and other accounting services in the remaining firms that have expertise in IFRS." The SEC staff agrees that a more gradual transition period to IFRS would give auditors the opportunity to keep abreast of the changes in U.S. GAAP related to any incorporation of IFRS, while a less gradual change might have firms choosing to exit the audit market – or, alternatively, have them "welcome the business opportunities created by the broader application of IFRS."
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