J.H. Cohn LLP, one of the top 20 accounting and consulting firms in the United States, has issued a comment letter to the Securities and Exchange Commission concerning the proposed roadmap for U.S. issuers to adopt International Financial Reporting Standards (IFRS).
In its comments, J.H. Cohn expressed "support of the objectives of the proposed roadmap" and agreed "that a uniform set of accounting standards provides real economic benefits to various constituents." Concurrently, the Firm stated that it recognizes the challenges confronting the global economy and urged that changes in financial reporting and oversight "be addressed globally by an independent standard-setting and regulatory body with sufficient resources."
The Firm provided further comment concerning the IFRS discussion on the following proposed roadmap issues:
- Proactive leadership by the SEC - J.H. Cohn encouraged the SEC "to continue, or even expand, its role in leading the transition to IFRS so that the various participants... become knowledgeable about the standards and about the process of becoming IFRS compliant."
- Proposed roadmap milestones - J.H. Cohn suggested that the SEC "set forth regularly scheduled, periodic communications regarding the Commission's evaluation of the progress” regarding the proposed roadmap milestones.
- Contingent nature of the SEC's decision - J.H. Cohn recommended that the transition from U.S. GAAP to IFRS be changed from a "contingent" adoption to a "certain" adoption.
- Proposed staggered adoption - J.H. Cohn expressed support of the roadmap's staggered adoption timetable and stated that the lessons to be learned from the transitions by large accelerated filers, along with a more even demand on the external resources anticipated to be involved in the conversions for the remaining filers, would outweigh the comparability issues.
- Conversion considerations - To ease the burden of conversion, J.H. Cohn recommended that the SEC consider permitting U.S. issuers to present one year (rather than two) of comparative IFRS financial statements in the year of adoption.
- Role of FASB - J.H. Cohn supported a presented option that would result in the continuing role of the FASB as the U.S. GAAP standards setter.
- Availability of audit services - J.H. Cohn expressed confidence that regional audit firms, including J.H. Cohn, would accelerate their commitment "to the investment in the training required to build the infrastructure to service U.S. issuers reporting under IFRS" upon the SEC's commitment to a "certain" adoption.
"An orderly transition to IFRS will require modifications to accounting policies, information technology systems and business processes," said William A. Kowals, J.H. Cohn partner and chairman of the J.H. Cohn IFRS Committee. "As such, issuers are urged to begin their transition planning early."
You can read a full copy of J.H. Cohn's comment letter.