Academic journal article Journal of Accountancy

SEC and FASB Remain Cautious about International Standards

Academic journal article Journal of Accountancy

SEC and FASB Remain Cautious about International Standards

Article excerpt

In December 1996, the World Trade Organization issued a statement of support for the International Accounting Standards Committee (IASC) project to develop a comprehensive set of international accounting standards (IASs). Other organizations, such as the International Organization of Stock Exchanges (IOSCO), say they will consider endorsing core international standards for cross-border securities offerings and the Securities and Exchange Commission, a member of IOSCO, also supports their development.

However, senior officials at the SEC and the Financial Accounting Standards Board are concerned that efforts to speed up the completion of the IASs could undermine their quality. The IASC's publication date is targeted for March, 1998.

SEC Chairman Arthur Levitt, Jr. told members attending the American Institute of CPAs 24th Annual Conference on Current SEC Developments in Washington, D.C., that although the SEC recognized the significance of the challenge the IASC had shouldered, the commission's acceptance of IASC standards was not a foregone conclusion. "That decision will be made after the core standards are completed, based on their substance," he said. "I have no doubt their acceptability to U.S. investors will depend on how well the standards measure up to our own." Levitt also said the SEC would not "jettison" U.S. generally accepted accounting principles in favor of international standards. "U.S. GAAP will remain an integral component of our capital markets," he said.

Arthur Wyatt, a consultant to the SEC on international accounting rules and a past IASC chairman, told the conference that the IASC's efforts were likely to be successful if quality was not sacrificed for undue haste in achieving an acceptable core set of standards. …

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