One of my summer goals was to write a comment or two about the status of the Securities and Exchange Commission’s (“SEC”) project to require U.S. public companies to adopt international accounting standards in their public filings, which from my limited perspective seemed very much “stuck in the mud”.
Well, Floyd Norris, a NY Times columnist, beat me to the topic. In his column article in today’s NY Times, Mr. Norris points out that even Christopher Cox, a former SEC Chairman and a former advocate of global accounting convergence, “has done an about face.” Mr. Norris further noted that in recent speaking engagements, Mr. Cox has stated his belief that “[t]he prospect of full-scale I.F.R.S. in our lifetimes has ceased to be. It is bereft of life. It rests in peace.” Of course, one should note, as did Mr. Norris, that former Chairman Cox is now a lobbyist for interests that are opposed to SEC adoption of international accounting standards.
So, what are the prospects for IFRS adoption in the U.S.? Well, according to Mr. Norris, not good. In recent years, specifically since Mr. Cox stepped down as SEC Chairman circa 2008, the Commission and its staff has been focused on other more pressing regulatory and enforcement activities. As a result, other issues, such as global accounting convergence has taken a back seat. Therefore, except for an occasional comment in a speech, Mary Jo White, the current SEC Chair, while not completely dashing hopes of U.S. adoption of IFRS, hasn’t publicly supported IFRS adoption either.
The SEC staff has been similarly “non-communicative” about the prospect of allowing U.S. public companies to file with the SEC using IFRS.
After reading Mr. Norris’s article, I believe my initial assessment was correct, when it comes to U.S. adoption of IFRS, we are still “stuck in the mud.”