In a recent address delivered to the CFA Institute's 2010 Annual Conference, SEC Chair, Mary L. Schapiro reiterated the SEC's support for the development of "a single set of high-quality, globally-accepted accounting standards which will benefit U.S. investors and investors around the world, as part of our commitment to better visibility and information." Schapiro remarked that, among the Commissions efforts to reinvigorate and revitalize market regulation, is its ongoing initiatives to protect investors from accounting fraud, and ensuring that reporting standards are consistent with current accounting practices.
Comprehensive and neutral accounting standards are the bedrock upon which our securities laws are based — standards that generate accurate, consistent, comparable, relevant, and reliable information for investors, lenders, creditors, and all others who make capital allocation decisions. We have not, cannot, and will not lose sight of that fundamental principle.
This includes "overseeing FASB's convergence efforts to facilitate a single set of high-quality international accounting standards, as we prepare for possible incorporation of international standards into the U.S. reporting structure for U.S. issuers." Schapiro went on to refute four myths about the SEC's approach to global accounting standards.
Myth #1: The SEC's commitment to global accounting standards is not as strong as it should be.
In February we clearly stated:
"The Commission continues to believe that a single set of high-quality globally accepted accounting standards will benefit U.S. investors and that this goal is consistent with our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. As a step toward this goal, we continue to encourage the convergence of U.S. GAAP and IFRS and expect that the differences will become fewer and narrower, over time, as a result of the convergence project."
That should be clear. So let's move on.
Myth #2: The U.S. may be committed, but it's dragging its feet regarding adoption of IFRS
[T]he fact is, we are moving forward. We are executing on a comprehensive work plan, dedicating significant resources to it and providing periodic progress reports on it. Our next report will be released in October of this year
Myth #3: The United States is fixated on process.
Inaccurate. The United States understands the importance of process to a successful conclusion. We will not accept shortcuts that undermine our larger goals or risk compromising the achievement of high quality global standards.
Myth #4: America is protecting its parochial interests.
No. What we are protecting are the interests of the investors in our markets, and we always will — that's what the Securities and Exchange Commission does. When investors — from anywhere across the globe — participate in our markets, they come under the SEC's umbrella of protection.
Schapiro made clear that, in the wake of the accounting frauds of the 1990s and the global financial stresses encountered today, the SEC is committed to creating a system of high-quality, globally accepted accounting standard that benefits American investors and investors around the world.
The full text of Chairman Schapiro's remarks is available at: http://www.sec.gov/news/speech/2010/spch051810mls.htm