The AICPA supports the goal of a single set of comprehensive accounting standards to be used by public companies in the preparation of transparent and comparable financial statements across the world and believes that one common accounting language would benefit investors as well as issuers. The AICPA said it believes that the standards issued by the International Accounting Standards Board (IASB) are best positioned to become those global standards.
Following is a summary of AICPA's main comments on the proposed Roadmap.
- The U.S. financial reporting system will take substantive, definitive steps to ready itself for IFRS only when the SEC sets a date certain on requiring companies to adopt IFRS.
- Certain of the “milestones” in the Roadmap are critical for an SEC decision on IFRS, while certain other ones are not.
- An improved funding mechanism for the IASB that would allow it to remain independent and objective is a critical milestone before moving to IFRS. AICPA encourage the SEC to use part of the current levy on U.S. public companies for accounting standard-setting activities as a permanent funding source for the IASB.
- The SEC has appropriately encouraged debate and feedback on whether, when and how the U.S. financial reporting system should move to IFRS. However, IFRS cannot be viewed in a vacuum - the auditing, regulatory, and litigation environment in the U.S. must adapt to allow for adoption of IFRS.
- The proposed Roadmap has too many disincentives that will block useful early adoption “test” cases.
- Mandating the use of IFRS in a staged transition beginning in 2014 is unreasonable if the SEC makes a determination to require use of IFRS by U.S. issuers in 2011. Our research supports that companies need a full 3-5 years (depending on how many years of financial statements must be presented at the transition date) implementation period from the SEC’s decision date.
- Companies reporting under IFRS should have access to a more complete list of tags than is currently available under existing IFRS XBRL taxonomies.
- Creating an environment where AICPA members and the U.S. financial reporting system can make an orderly transition to IFRS is a strategic initiative of the AICPA. AICPA is taking concrete actions to create awareness and educate the market place on IFRS, and to incorporate IFRS in the Uniform CPA Exam, among other actions.
The AICPA said, “It is our position that, for any U.S. move to IFRS to be successful, it must be planned, organized and managed. For our part, the AICPA has taken a leadership role and intend to continue to do so as the SEC decides upon an official direction for their IFRS initiative.”
The full text of AICPA’s comment letter can be viewed online.
