Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

A few troublesome questions that haven’t been asked about IFRS

with 2 comments

In a long post in advance of the roundtable held this week by the SEC on IRFS, Professor Tom Selling gives lots of inside-baseball info on the roundtable.  See the post No News from the SEC on its IFRS Roundtable is Bad News

 Later in the article he raises some superb questions he would like to see asked, but doubts will be discussed. Some examples:

 Why are we doing this?

Even if the panelists selected* turn out to be slightly more open-minded and honest than the shills I expect them to be, I am concerned that they won’t have more than a glimmer of a chance to respond to strategic questions like, “Why should we do this?

Sovereignty. This touches on the opt out issue that is of concern to me.

Will be IASB race to the bottom by accepting every demand that every country makes?  India’s insistance on deferring foreign-exchange losses is the example in the post.  This approach would drop accounting to the lowest common denominator based on international politics.

The alternative, offered by the SEC as a preventive to such problems, is for each country to have an opt out. That means each country can pick and choose which parts of IFRS they like.

This puts us back at the place of having a separate set of accounting rules for each country. Getting out of that place is the stated reason for this convergence push. What is the point if we wind up back in the same place, if it is such a horrible place to be? (An unexamined assumption, by the way!)

Where is this standard, unified set of accounting rules?

the SEC staff admits that very few countries have adopted IFRS as issued by IASB. Ironically, U.S. GAAP is probably closer to IFRS than the versions in use by the majority of those countries which have already adopted to some degree or another.

Will we achieve the stated goals? The question he would like to ask:

Will Comparability and Cost Savings Really Occur?

Have any companies other than the very largest even looked at this issue? As smaller public companies get their head above water and look at this, will they buy in? He says a reported called him asking for contacts at a small company who could comment. The reporter can’t find any smaller companies that have thought about IFRS.

Just a few of the major questions the professor would like to see discussed at the roundtable.

Written by Jim Ulvog

July 8, 2011, 8:10 am at 8:10 am

Posted in Accounting

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  1. […] of my other posts are here, here, here, and here. Or use the search button on top right […]

  2. […] 7/8/11 A few troublesome questions that haven’t been asked about IFRS […]

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