LONDON (Reuters) - The United States may have to give up its seat on a top global accounting body if it continues to drag its feet over the adoption of international book-keeping rules, the European Union’s executive said on Wednesday.
Discussions over whether the United States would adopt the International Financial Reporting Standards (IFRS) have been going on for a “very long time and, despite repeatedly expressed commitments from the U.S., things are advancing very slowly”, European Commission spokesman Stefaan De Rynck said.
The rules, compiled by the London-based International Accounting Standards Board (IASB), are used in more than 100 countries and are monitored by an IASB committee on which the U.S. sits.
“The lack of a clear vision from the U.S. creates uncertainty and hampers the IFRS from becoming a truly global accounting language,” said De Rynck, who speaks on behalf of Michel Barnier, the EU commissioner responsible for financial services.
“It is also becoming more difficult to justify the representation of jurisdictions not applying IFRS in the IASB governance framework,” he added in remarks seen as taking a swipe at the United States.
The U.S. Securities and Exchange Commission (SEC) drew criticism from the IASB on Friday by saying there was no broad support for adopting IFRS in a comprehensive way and gave no timetable for taking such a decision.
SEC chairman Mary Schapiro is a member of the IASB’s Monitoring Board, a key committee of select regulators that has a powerful influence over the IASB’s work. Barnier also sits on the board, as does Ryutaro Hatanaka, of Japan’s Financial Services Agency. Japan, too, has not yet taken a final decision on mandatory use of IFRS.
The IASB declined to comment.
Efforts are under way to expand the Monitoring Board to include more emerging market economies, perhaps including China, with membership clearly dependent on use of IFRS.
Defining what “use” means is ongoing. The United States allows about 500 foreign companies listed on its markets to use IFRS for filing statements to the SEC, while about 30 companies in Japan use the global rules.
The United States, EU and other members of the G20 group of top economies have pledged to have a single set of high-quality global accounting standards in place by mid-2013.
By this deadline, changes at the SEC and the U.S. presidential elections will be out of the way, making it easier for the watchdog to revisit the accounting issue.
Editing by David Goodman