U.S. accounting body presses to keep its global sway
NEW YORK (Reuters) - Top U.S. accounting standard-setters are making clear they want to be part of a new panel to help shape international accounting rules, but they may fall short of a key membership condition.
Requiring panel members to commit to a single set of global accounting standards would exclude the United States, which has not yet decided to switch to international rules, the U.S. Financial Accounting Foundation said in a letter on Thursday.
The letter came amid mounting pressure from European countries for a greater say in the way international accounting rules are set.
Excluding the United States from a new forum could limit U.S. influence over international standards, eventually causing bigger differences between U.S. and international rules.
The International Accounting Standards Board (IASB), which writes rules used in over 100 countries, has been working with the United States for a decade to align U.S. and international rules, with scant progress to date.
In November, the IASB proposed a new 12-member Accounting Standards Advisory Forum, expected to become a key source of input to international rules.
But members would be limited to countries that have signed a commitment to a single set of global accounting standards - something the United States has refused to do.
US COOLS ON ACCOUNTING SWITCH
A single set of standards is a worthy goal, but it is more practical to aim for "highly comparable" standards, the FAF said in its letter to its global counterpart, the International Financial Reporting Standards Foundation.
The FAF oversees the U.S. Financial Accounting Standards Board, which sets the Generally Accepted Accounting Principles, or GAAP, used by U.S. companies.
The U.S. Securities and Exchange Commission, which oversees FAF and FASB, has mulled a move to international rules for years but has recently cooled on making the change.
Support for a switch has waned amid concerns about the costs and a belief by many that U.S. GAAP is superior because it puts more limits on corporate managers' judgment than global rules.
"Many investors, including large institutions, were at best lukewarm and in some cases pretty negative about the switch," said Joseph Carcello, an accounting professor at the University of Tennessee.
Groups in both the United States and overseas have lost patience with the protracted efforts of IASB and FASB to align their standards, other accounting experts said.
"Nobody's seeing the kind of results everybody would like to have seen from the two boards working together for a decade," said Bruce Pounder, a director of professional programs at SmartPros, which provides education to accounting professionals.
IASB leaders have warned for some time that the United States could lose its influence over global standards if it did not commit to international accounting, but Pounder said its influence was limited to begin with.
The failure of the two boards to reach consensus in some key areas shows that FASB's sway was constrained, he said.
"There's a lot of folks in the United States who would say 'we would be happier if FASB spent less time doing that and more time simply focused on improving U.S. GAAP,'" Pounder said. (Reporting by Dena Aubin; Editing by Kevin Drawbaugh; Editing by David Gregorio)