Two key advisors to Barack Obama today expressed different opinions over the SEC move to shift U.S. accounting rules to IFRS.
The clash casts some doubt on the SEC roadmap requiring large public companies to move from U.S. GAAP to IFRS by 2014.
Mary Schapiro, SEC Chair:
“I would proceed with great caution so we don’t have a race to the bottom.”. “I won’t feel bound by the [IFRS] roadmap.”
Paul Volcker, Chairman of Obama's Economic Recovery Advisory Board:
"We ought to be working toward international accounting standards and have them standard around the world under the general aegis of the International Accounting Standards Board, and there's been a lot of progress in that direction."
Volcker is a a former chairman of the International Accounting Standards Committee Foundation, IASB's parent organization. IASB determines the makeup of IFRS. Volcker is also a former chairman of the U.S. Federal Reserve Board.
Schapiro said she has concerns about the pace of the timeline, the independence of IASB, and the quality of the IFRS standards. As well, Schapiro has concerns over the lack of detail in IFRS and the additional room for interpretation, and the cost cost of the conversion to IFRS, estimated by the SEC to be up to $32 million for the largest companies adopting IFRS.