Thursday, February 5, 2009

The Brakes on IFRS

SEC Chairman Mary Schapiro Not following Cox on IFRS

Incoming chair Mary Schapiro, approved by the Senate as SEC Chairman in January, will not follow Christopher Cox on IFRS. She wants a slower approach to U.S. adoption of international accounting rules.

During Schapiro’s confirmation hearings she was asked several questions, including questions about IFRS, Sarbanes Oxley and other topics. She made oral responses, and releases a letter in January providing her written responses. In her she said that she won’t let the International Accounting Standards Board make accounting rules for U.S. companies—yet.

In Schapiro's opinion, the IASB has not shown it can resist political pressure—as became obvious when Sir David Tweedie, IASB chair threatened to resign if there was a recurrence of the IASB caving in to pressure by banks and politicians to change the rules on fair value reporting standards.

Schapiro also has said that she is concerned about IFRS standards quality and the fast tracking of the adoption in 2014. The SEC extended the deadline for comments on the 2014 adoption date by 60 days to April. The previous deadline was February 19.

Schapiro wants FASB and whatever standard-setting authority that succeeds it to not be influenced by political pressure. She wants the SEC to have a high level role in oversight of The FASB to ensure that they are diligent in keeping up with needed accounting changes.

Schapiro also stated that accounting rules were not responsible for the recent market crash.

You can read the written responses here.

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