US seeks secure funding of global accounting board

* SEC official says focused on IASB’s funding

* Says economic security of IASB is crucial

* Seeks ‘no strings attached’ funding

NEW YORK, April 29 (Reuters) - U.S. regulators are focusing on securing funding for the International Accounting Standards Board as they consider moving U.S. companies to international accounting rules, a top U.S. official said on Thursday.

Jim Kroeker, chief accountant of the U.S. Securities and Exchange Commission said it would be important to secure the funding for the London-based International Accounting Standards Board (IASB), which writes the International Financial Reporting Standards (IFRS) used by more than 100 countries.

“A stable broad based funding system with a diversity of capital market participants providing ‘no strings attached’ funding is of great importance to establishing a structurally sound international standards setter,” Kroeker said in comments to an accounting conference at Baruch College in New York on Thursday.

“If funding commitments from countries come with strings attached ... the objective of the international standard setter can be threatened.”

The SEC said in February it was committed to developing a single set of high-quality global accounting rules and it would come up with a “work plan” so it could decide next year about whether U.S. companies should move to IFRS rather than U.S. Generally Accepted Accounting Principles (GAAP). The SEC said at the time any change would occur no sooner than 2015.

Kroeker said on Thursday the “economic independence” of the IASB and the IASC Foundation that oversees it, is one of the issues the SEC is focusing on in its work plan.

Kroeker mentioned concerns about the “susceptibility to undue political or commercial influence.”

The IASC Foundation is charged with securing funding for the IASB and, while some countries have levy systems to supply it with funding, much of its funding is still derived from corporate donations.

About two of every three countries that use or permit the use of IFRS accounting rules do not contribute any funding to the IASC, Kroeker said on Thursday.

About 20 percent of the funding for the international accounting standard setter is expected to come from U.S. sources and U.S. corporate donations this year -- the largest amount and percentage of funding given by any country in the world, Kroeker said. Under the Sarbanes-Oxley 2002 accounting reforms, the United States secured funding to the U.S. Financial Accounting Standards Board, which writes U.S. accounting rules, by imposing something similar to a levy system on U.S. companies.

“Longer term security for the IASC Foundation and the IASB is hindered by a lack of permanent commitments,” Kroeker said on Thursday. “Bringing even the major capital markets and the U.S. into a greater degree of long-term funding would be a significant milestone.”

Kroeker’s comments come as political pressure on accounting rule makers has grown during the financial crisis. Tensions grew last year when some in the European Union threatened to make their own changes to accounting rules if the IASB did not make immediate changes to fair value, or mark-to-market accounting rules. While the IASB has been working on its independence, the increased political pressure has heightened concerns about its funding.

Funding security for the IASB was seen as critical for the U.S. regulators considering switching to international accounting standards so they could still meet the requirements of Sarbanes-Oxley.

The IASC Foundation is expected to complete a review of its constitution and take into account proposals to enhance its public accountability later this year. (Reporting by Emily Chasan; editing by Andre Grenon)