SEC to be just as tough on international reports-official

By Emily Chasan

NEW YORK, April 30 (Reuters) - Regulators at the U.S. Securities and Exchange Commission will be just as tough when examining financial statements filed under international accounting rules, a top official said on Wednesday.

"Unequivocally, we will review financial statements prepared under IFRS (International Financial Reporting Standards)," said Wayne Carnall, deputy chief accountant in the SEC's division of corporation finance.

"We will comment on financial statements, we will challenge the accounting under IFRS and if the financial statements are wrong and do not comply with IFRS we will require those companies to restate," he added.

This year, U.S. regulators began allowing foreign companies that list their shares in the United States to file financial statements under IFRS rather than forcing them to reconcile to U.S. Generally Accepted Accounting Principles (GAAP) as was done in the past.

If the SEC did ask a European company to restate results, Carnall said it has set up procedures to consult with the Committee of European Securities Regulators (CESR).

"There have been a limited number of situations where we have consulted with (the CESR), and we will certainly do so in the future," Carnall said in comments to a Practising Law Institute conference in New York.

He added that it was possible the two regulatory bodies could, at times, disagree.

"They might accept the accounting and we may believe it is wrong, and the way the protocols are set up we could each have different answers."