* FRC's Bischoff sees U.S. moving closer on global rules
* Bischoff expects prudence to make reappearance in rules
By Huw Jones
LONDON, June 10 The United States may allow its
companies to use international accounting rules while stopping
short of making their use mandatory, a UK regulatory agency said
World leaders have called for a single set of global
book-keeping rules so investors can compare companies more
So far, the United States has declined to adopt the
International Financial Reporting Standards, or IFRS, which are
written by the London-based International Accounting Standards
Board. The rules are used in more than 100 countries and are
mandatory in the 28-country European Union.
"My own view is that we won't get total harmonisation, that
is having one set of accounting rules and standards across the
world," Win Bischoff, the new chairman of Britain's Financial
Reporting Council, which polices accountants and audit firms.
"There is increasing convergence - for example, the U.S.
Securities and Exchange Commission has allowed global companies
listed in New York to use IFRS," Bischoff told a financial
conference organised by Lansons.
Foreign companies listed in the United States are not
required to file separate accounts under U.S. rules, known as
Generally Accepted Accounting Principles, or GAAP, and Bischoff
said that flexibility could be expanded.
"I could see that American companies would be given the
choice over a period of time. Will they stick to U.S. GAAP?
Probably they will stick to U.S. GAAP, but I think the two
standards are getting closer together."
There is talk in the accounting industry that the U.S.
Securities and Exchange Commission, after resisting a switch to
IFRS, may propose in coming months giving U.S. companies a
choice of using IFRS or GAAP.
Observers say some big international U.S. companies would
probably take up the offer, but domestically focused listed
companies are opposed to mandatory use of IFRS.
Bischoff also said he was against special accounting rules
for banks, which some lawmakers have called for after taxpayers
had to bail out lenders in the 2007-09 financial crisis.
But he does expect more emphasis on "prudence" in the
accounting board's rules, or deliberately erring on the
conservative side in making some assumptions in bank accounts,
especially for their provisions against possible defaults in
Some UK lawmakers, such as former finance minister Nigel
Lawson, want to reinsert a reference to prudence in IFRS rules.
The International Accounting Standards Board is discussing that,
and such a reference is likely to be reinstated, a senior
official involved in the discussion told Reuters.
The issue is divisive; accountants say bookkeeping is meant
to be a neutral snapshot rather than make forward-looking
"I believe the concept of prudence will be very much brought
to the fore," Bischoff said in relation to the accounts of
A former top banker, he expects a move to a position where
prudence and a true and fair view at a given moment, does
include a forward-looking element.
(Reporting by Huw Jones; Editing by Larry King)