| WASHINGTON, July 18
WASHINGTON, July 18 A bipartisan group of U.S.
lawmakers is urging Securities and Exchange Commission Chair
Mary Jo White not to allow companies to choose between U.S. and
global accounting standards, a move they said could confuse
investors and lead to legal challenges.
In a June 27 letter seen by Reuters and not previously
reported, the Congressional Caucus on CPAs and Accountants said
that allowing two different sets of accounting rules will give
companies a way to pick the rule set that paints their books in
the best light.
"A single set of high-quality globally accepted accounting
standards is a goal worth striving for," they wrote. But
permitting the use of two different sets of rules "will set back
the interests of investors in the name of global harmonization."
The letter is signed by 12 U.S. Senators and members of the
House of Representatives from both parties who formed the
accounting caucus last year.
White has not explicitly said whether she is considering
proposing rules that would let companies choose between U.S. and
global standards. A spokeswoman for the SEC declined comment.
However, in speeches earlier this year, White has said that
one of her priorities is to have the SEC decide "whether to
further incorporate" global accounting standards into the U.S.
For more than a decade, the SEC has wrestled with whether to
phase out U.S. generally accepted accounting principles, or
GAAP, in favor of international financial reporting standards or
IFRS, which are used by more than 100 countries.
The move toward global standards gained momentum in the
mid-2000s under then-SEC Chair Chris Cox.
In 2007, Mary Jo White's husband John White, then director
of the SEC's corporation finance division, helped develop a road
map designed to pave the way for the use of both rule sets in
But over time, the effort lost steam.
By 2012, a move toward incorporating international standards
seemed dead after SEC staff issued a report describing a litany
The list included concerns about "underdeveloped" areas,
such as accounting for the insurance industry; a divergence in
how countries applied the global rules; and a shaky funding
mechanism for the international accounting standard setters.
BACK ON THE TABLE
Discussions about allowing companies to use either of the
two rule sets came up with international accounting standard
setters at an April meeting in Sydney, Australia, according to a
public report summarizing the meeting.
"SEC Chair Mary Jo White had said she hoped to be able to
come back to the trustees with some proposals in the next
months," the report said.
"The possibility of allowing an option by U.S. companies was
for the first time mentioned in the conversations without
It is unclear whether White could even win support for such
a move from her fellow SEC commissioners.
The issue would likely spark a fierce debate among public
companies, investors and accounting firms.
Some big multinational companies such as Ford, for
instance, have said they support a switch to global accounting
standards because it could simplify financial reporting and help
companies save money.
But others, such an Allergan, have opposed the idea,
saying it will cause tax and legal complications and increase
costs for companies.
IFRS is set by the London-based International Accounting
Standards Board, while U.S. GAAP is set by the Connecticut-based
Financial Accounting Standards Board.
The SEC has been supportive of ongoing work by the two
boards over the years to eliminate their differences as much as
possible. However, sticking points remain, and to date there has
been no agreement on how to achieve a single set of standards.
In the letter to White, the lawmakers said any expansion of
the use of IFRS in the U.S. should be thoroughly vetted with the
"We invite you to come and share your thoughts on this
process with us in greater detail," the lawmakers added.
(Reporting by Sarah N. Lynch; Editing by Karey Van Hall and