US to adopt international accounting rules

Seal of the U.S. Securities and Exchange Commi...

Image via Wikipedia

Oct 5 (Reuters) – The United States would still play a pivotal role in shaping global accounting rules if it switches to standards set by the international accounting body based in London, a top rule-maker said on Wednesday.

Hans Hoogervorst, chairman of the International Accounting Standards Board (IASB), sought in his first U.S. speech to reassure America that giving up sovereignty in accounting rulemaking would not mean a loss of influence for the world’s biggest capital market.

The U.S. Securities and Exchange Commission (SEC) is due to announce by year end whether it will make the switch.

World leaders including President Barack Obama have committed themselves to a single set of global accounting rules to improve corporate reporting transparency.

But some in Congress and smaller American firms are leery about a loss of independence in standard setting and the extra costs of switching to global rules.

Hoogervorst said U.S. sovereignty would be protected by the SEC having a final say before any IASB rule is introduced.

“Such endorsement mechanisms provide an important ‘circuit breaker’ if the IASB produced a standard with fundamental problems for the United States,” Hoogervorst told an accounting conference.

The SEC would remain in full control of enforcement.

“So there is absolutely no danger of importing different enforcement standards from abroad into the United States,” the former Dutch finance minister added.

Big companies such as Archer-Daniel-Midland Co , Bank of New York Mellon Corp , Kellogg Co , Chrysler, United Continental Holdings Inc and Ford Motor Co have called for U.S. adoption of IASB rules, he added.

Hoogervorst said it would be reasonable that a relatively long transition to full adoption is provided, along with an option of early adoption for companies that want to. (Writing by Huw Jones; Editing by David Holmes)

via Global accounting rule setter courts U.S. support | Reuters.