Ex-SEC official pushes for int'l accounting in US

By Emily Chasan

NEW YORK, May 13 (Reuters) - U.S. companies should begin using international accounting rules to fit in with the rest of the world, but regulators and accounting rule makers will also have to adjust, Donald Nicolaisen, former chief accountant of the U.S. Securities and Exchange Commission said on Tuesday.

Nicolaisen, who three years ago was the first to lay out a road map for foreign companies to file financial reports with U.S. regulators using international accounting rules, said he believes U.S. companies should also begin to use those standards.

"I do think it should be mandatory," Nicolaisen said at an Ernst & Young [ERNY.UL] conference in New York, suggesting U.S. companies be given the option of adopting International Financial Reporting Standards, or IFRS, early before every company be forced to use them.

"We all know we can learn from the pioneers," Nicolaisen said, suggesting that the sooner some U.S. companies file reports using IFRS, the earlier regulators, accounting rule makers and other companies will learn about kinks that have to be worked out.

The SEC, which has been following Nicolaisen's road map, earlier this year dropped the requirement for foreign companies to reconcile financial statements to U.S. Generally Accepted Accounting Rules, or GAAP.

The investor protection agency is now grappling with the idea of allowing U.S. companies to use international standards as well. About 110 countries are currently using, or plan to use IFRS, and some U.S. firms have complained U.S. GAAP puts them at a competitive disadvantage.

Nicolaisen acknowledged that a U.S. move toward international standards would require a sea change among companies, regulators, accounting rule makers and other market players.

"Having the global standard setting community and the global regulator community working together would be extremely helpful," Nicolaisen said.

"I've often thought that the best solution may be simply to say as a regulator: All those old methods of accounting you grew up with, toss them all aside. Here's the new model.'" (Editing by Andre Grenon)