Tuesday, August 23, 2011

Int’l Institute Emphasizes Need for Consistent High-Quality Global Accounting Standards in Letter to SEC

By bringing the U.S. market into the international accounting system, noted the Institute of International Finance, the SEC has the opportunity to take a significant step toward the development of integrated, efficient and well-informed global markets. Achieving this will certainly be in the public interest and further the protection of investors, said the Institute in a letter to the SEC, and also contribute to the broad interest of U.S and non-U.S. investors alike in enhancing financial stability and creating efficient markets. A single, consistent, global set of high-quality standards will also facilitate capital formation and allocation across the global economy.

The Institute emphasized that nothing could contribute more importantly toward these goals than adoption of IFRS as the single language of accounting in all the increasingly interlinked major financial centers. The Institute believes that there is a high level of support among internationally active firms for the adoption of IFRS in the U.S.

The Institute is convinced that IFRS generally constitute high-quality international standards developed through proper due process and public consultation procedures, while at the same time recognizing that work on important projects is in process. Moreover, the governance of the IASB has been substantially improved, said the Institute, with an important dimension of this being the oversight provided by the IFRS Foundation's Monitoring Board, of which the SEC is a member.

The Commission can have confidence that IFRS will generally continue to constitute high-quality standards as they develop and evolve, said the Institute, citing the keen interest of international issuers as well as the support of IOSCO and the international regulatory community.

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