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September 16, 2008

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» "Top Ten Reasons Why U.S. Adoption of IFRS is a Terrible Idea" from Accountants Round Up
By Thomas I. Selling: Now that the SEC has proposed its roadmap for jettisoning US GAAP in favor of IFRS, critics are finally starting to build momentum. Charles Niemeier, outgoing PCAOB board member, delivered a brilliant critique of the SEC's [Read More]

Comments

Tammy

I thought the AICPA was heavily promoting IFRS because they want to stay relevant. After losing so much power to the PCAOB, they seem to be sort of sucking up to the SEC these days.

jdpoulin

Yikes! That is a pretty direct article. No one else is likely to have the nerve to state the obvious reasons you have noted. I can't figure it out either and I am very well versed and plugged into the accounting establishment. It will take public company CEOs to complain about the costs to get any traction. I can't imagine a new chairman at the SEC (with any luck a D) taking a different direction from the roadmap at this point. Once the reconciliation was dropped it was all over for US GAAP. But on the flip side of your arguement that the US won't have any influence over IFRS, many techy accountants actually think (and the EU is affraid) we US folks will just create the same complexities in IFRS that we have in the US. And if you had a Levit type SEC for any period of time, the SEC could actually set different or additional requirements for US public filers than IFRS requires - just like the SEC does now for US public companies compared to US private companies not under the SEC jurisdiction. I have hope that these last 2 points will in the very long run make IFRS for SEC registrants as good, or nearly as good, as US GAAP. But the cost. I just can't see how it will ever be justified. It is nuts. No CEO worthy of the title would ever allow such expenditures for any project inside their organizations. The ROI is either nonexistent or negative.

Linda Cavanaugh

I am thrilled to be moving to IFRS and it is for purely selfish reasons. The statistic that won me over: "US GAAP has over 250,000 pages while IFRS only has 2,500." As a research accountant, my job is going to be a whole lot easier and may even become unnecessary. Maybe I will get a chance at early retirement.

Independent Accountant

I agree with everything you wrote.

Policy Director

This "arrangement" between the accounting firms and the regulators has to be one of the biggest conficts of interest I have ever seen over my 20 year career. I can't tell you how many calls a day I get from such firms trying to pitch me their IFRS assessment programs. Whatever happened to letting folks try to run their business. Unfortunately the firms are leveraging their positioning with Corporate Boards (vis-a-vis audit committees) to drive the perceived urgency to so something.

With the current events on Wall Street going down, it would seem that SEC Chairman Cox has the shelf life of a rotten banana. Given recent event, I just don't see Congress in the mood to hand over our sovereign accounting standards to foreign dominated body anytime soon, especially if/when events start impacting Main Street versus Wall Street.

maggie

I love your site. I am just getting into accounting and finance and trawling through the web trying to find great sites. Yours is definitely a great site. Thanks for the great discussion and interesting writings. I am trying to find some other sites similar to the introduction to financial ratios section at http://www.thefinanceowl.com . Can anybody recommend anything?
Yours Maggie

Warren Miller

Well, Tom, you were doing fine until you got to #1. Following that ridiculous advice, you should never change the oil in your car.

Other than that, I thought your post was absolutely dead-on. And we can all be sure that the pander bears @ AICPA are doing what they always do: trying to seize opportunities to line their own pockets, and to h*** with investors, the public, and everyone else.

[Portions deleted by Tom]

Other than #1, thanks for the great post.

Louisa

This is some really great information. I work as an accountant in Boston at Vitale Caturano (www.vitale.com) and have been doing some research about the shift to IFRS, and this post has by far been the most helpful. I am definitely going to keep coming back, thanks!

maggie

This is fascinating reading. I think I will make reference to some of your ideas together with some I picked up at http://www.thefinanceowl.com/ in my dissertation.
Many thanks and keep up the great work
Maggie

John

I agree 100%. The more I read about IFRS the more I see Enron as the rule rather than the exception. One Big Four accounting member actually blamed U.S. GAAP in part for Enron. Can you believe that? Keep up the good work.
John

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