Where exactly has the Congressional Caucus on CPAs and Accountants been all this time? The SEC has only been dragging its heels on convergadoption since, like, the beginning of time or at least 2008, which might as well be the beginning of time as far as we are concerned.
Now, these guys — who, in their defense, have only been back in business since early last year after being originally formed in 2011 — have come out of the woodwork to plead with SEC Chair Mary Jo White to slow it the hell down on IFRS. Think of the children investors!
In the letter, the caucus warns against a "two-GAAP" system, and cautions the SEC to slow their roll and think this through before they make any rash decisions. LOL. Guys, do you not read the Journal of Accountancy? There's absolutely no rush here, nor has their been.
Let's read:
June 26, 2014
The Honorable Mary Jo White
Chair
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-1090Dear Chair White:
Thank you for your service safeguarding investors and diligent work protecting our financial markets.
As members of the bipartisan Congressional Caucus on CPAs and Accountants (CPAA Caucus), we would like to share our concerns with your recent statements regarding the further incorporation of International Financial Reporting Standards (IFRS) into the U.S. financial reporting system.
We share the Securities and Exchange Commission’s belief that “a single set of high-quality globally accepted accounting standards” is a goal worth striving for. However, we are worried that adopting IFRS alongside GAAP will set back the interests of investors in the name of global harmonization.
Expanding the use of IFRS domestically presents a host of potential problems, including: placing standard setting with a foreign institution, beyond the purview of domestic regulators; creating a “two-GAAP” environment, enabling accounting arbitrage; investor confusion arising from differences in accounting treatments; and possible legal challenges of accounting treatments under IFRS’ principles based system.
The process by which the Commission arrives at a global accounting standard is just as important as the standard itself. Throughout any standard setting process, it is essential that the public has the opportunity to make meaningful comments. This is a sentiment we have even asked of non-governmental authorities under the jurisdiction of the SEC. As the SEC looks to potentially deepen the use of IFRS domestically, it should use all of the regulatory tools at its disposal to seek stakeholder input, including a formal notice and comment period before it moves forward.
The Financial Accounting Standards Board and the International Accounting Standards Board are currently working on the convergence process. Within that process we have seen where incongruous policies must be properly hammered out. Simply skipping over this work is not advisable.
As you contemplate moving forward with further consideration of IFRS, we invite you to come and share your thoughts on this process with us in greater detail. As current and former CPAs and accountants, we have a deep interest in this topic and would appreciate the opportunity to begin a dialogue with you at your earliest convenience.
Considering how long this process has taken, we can guess that Mary Jo White will have been replaced by at least a half a dozen SEC chairs before this matter becomes urgent. But just in case ole Mary Jo gets any bright ideas, know these guys are watching and worried.
For what, who knows. You and I and even my cat know we will not be using IFRS in the U.S. any time soon.