Paulson and Bernanke support U.S. accounting convergence

WASHINGTON (Reuters) - Top U.S. financial policy-makers on Thursday spoke out in support of efforts to move toward a common set of international accounting standards that they said could attract more foreign companies to the United States.

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson also said they did not believe the convergence would sacrifice the quality of U.S. companies' financial reporting.

"There are different accounting regimes that have different standards and different requirements. That doesn't make them worse than ours," Paulson told lawmakers during a House Financial Services hearing on financial regulation.

"We've had plenty of issues ... in our own accounting regime," he added.

Bernanke applauded the U.S. Securities and Exchange Commission's action in November to allow foreign companies to submit their financial statements using International Financial Reporting Standards (IFRS).

Previously, foreign companies had to reconcile the data to U.S. Generally Accepted Accounting Principles (GAAP), which can be a costly and time-consuming process.

"There's more incentive for foreign companies to operate in the United States," Bernanke said. "It doesn't create any major problems with our accounting system."

The SEC is also exploring allowing U.S. companies to file data using international standards and has floated a "concept release" to gather opinions on the issue.

International standards are more flexible and based on professional judgment, as opposed to U.S. GAAP, which is prescriptive and based on complying with specific rules.

About 110 countries are using, or plan to use, IFRS.

"I am supportive of it," Paulson said about the SEC's efforts to more closely align the accounting standards.

Bernanke said the domestic and international accounting boards are already on a convergence path and said the standards "will be the same or similar in a couple of years."

The SEC has yet to set a timeline for the United States to adopt IFRS. The U.S. accounting rule-maker Financial Accounting Standards Board and the London-based International Accounting Standards Board are expected to soon release an agreement that will lay out how the boards plan to work together and prepare the industry for one set of accounting standards.

(Reporting by Karey Wutkowski; Editing by Andrea Ricci)