IFRS in the USA: The Key Question That Hasn't Been Answered—Or Even Asked

As I explained in my first "IFRS in Perspective" post, this blog focuses on the role that International Financial Reporting Standards (IFRS) can and should play in the future of financial reporting in the United States. In this post, I'll share my thoughts on a question of critical importance that we in the United States haven't answered yet. In fact, it's a question we haven't even asked. To have any hope of creating the future that we want with regard to financial reporting, we must ask and answer this key question, and we must do so before we attempt to make any public-policy decisions about IFRS.

The question is a simple one of goal definition, specifically, "What policymaking goals should we be pursuing with regard to financial reporting standards?"

If we can't achieve consensus on specific policymaking goals, we have no realistic hope of achieving consensus on specific policies with regard to IFRS in particular or financial reporting standards in general. And if that's the case, the likelihood of us making good policy decisions is nearly zero.

In contrast, if we do achieve consensus on what we seek to accomplish through our policy decisions, it will be much easier for us to make good policy decisions with regard to financial reporting standards in general and IFRS in particular. We would also be far more comfortable with and confident in our decisions.

You may have some opinions about what our policymaking goals should be. I have some too, and so do lots of other folks who participate in the financial reporting supply chain. But I doubt that our opinions are all the same, and because there are many interested parties likely to have diverse opinions, building consensus on our policymaking goals will be challenging. So what will help us maximize our chances for success at consensus building? To me, it boils down to two things.

First, we should explicitly reject attempts by any one individual, organization, or interest group to dominate our goal-setting process. This includes discouraging the Securities and Exchange Commission (SEC) from persisting in its attempts to define IFRS policy goals unilaterally. There are far too many stakeholders who are independent of the SEC for the goal-setting process to revolve around the SEC. We'll be much better off if the preparer, auditor, academic, regulator, and investor communities are all engaged directly in the goal-setting process.

Second, we should strive to reach consensus on the desirable attributes of policymaking goals before focusing on the goals themselves. In other words, we should seek agreement on criteria that will help us assess proposed goals and identify which goals would be better for us to embrace than others. I have developed a set of such criteria, and I'll share those criteria with you in my next post.

In concluding this post, I say if we're going to argue about IFRS or any other public-policy matter involving financial reporting standards, let's argue about the ends first and the means second. Otherwise we'll argue forever without accomplishing anything. And as we've already learned, if any of us tries to define a path forward without having first obtained mutual agreement on our destination, what we're likely to end up with is a roadmap to nowhere.

This blog

Bruce Pounder, MBA, CMA, CFM, DipIFR (ACCA) is an internationally recognized expert on corporate financial reporting and the global convergence of financial reporting standards. He has two decades of firsthand financial reporting experience as the CFO of a privately held corporation and has served as a financial reporting consultant to many public corporations. Currently Bruce is President of Leveraged Logic, a leading provider of educational products and services to accounting professionals. He is the author of the 2010 U.S. Master GAAP Guide (CCH), the Convergence Guidebook for Corporate Financial Reporting (Wiley), and the monthly "Financial Reporting" column of Strategic Finance magazine. Bruce also presents the live webcast series "This Week in Accounting."

More from this blog

Bloggers crew

Steve Knowles has spent 25 years in business and practice in the UK, but he also worked in the states and the years haven't dulled his way of seeing an alternative view to everyone else, and every day is a new adventure.


Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies.


Allan Boress, CPA, with over 25 years as a practitioner and consultant to the accounting profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.


Larry Perry, CPA, CPA Firm Support Services, LLC, is the author of accounting and auditing manuals, author and presenter of live staff training seminars, and author of webcast and self-study CPE programs. He blogs about small audits, reviews, and compilations.

Sandra Wiley, COO and Shareholder, is ranked by Accounting Today as one of the 100 Most Influential People in Accounting as a result of her prominent role as an industry expert on HR and training as well as influence as a management and planning consultant. She is also a founding member of The CPA Consultant's Alliance. Sandra is a certified Kolbe™ trainer who advises firms on building balanced teams, managing employee conflict and hiring staff.

Maria Calabrese, CIR, Human Resources manager for Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC in Cranford, New Jersey, Maria's topics revolve around the world of: Mentoring, Performance management, and The "Y Generation," a.k.a. "The whY generation".


William Brighenti is a CPA, Certified QuickBooks ProAdvisor, and Certified [Business] Valuation Analyst, operating an accounting, tax, and QuickBooks consulting firm in Hartford, Connecticut, Accountants CPA Hartford.


Ken Garen, CPA, is the co-founder and President of Universal Business Computing Company (www.ubcc.com), a software development firm of high-volume, high-productivity accounting and payroll technology.


Eva Rosenberg, MBA, EA, is the publisher of TaxMama.com, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.


Amy Vetter, CPA, CITP is the CPA Programs Leader for Intacct Corporation responsible for leading the CPA/BPO Partners nationally.

Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
Scott H. Cytron, ABC, is president of Cytron and Company, known for helping companies and organizations improve their bottom line through a hybrid of strategic public relations, communications, marketing programs and top-notch client service. An accredited consultant, Scott works with companies, organizations and individuals in professional services (accounting, finance, medical, legal, engineering), high-tech and B2B/B2C product/service sales.

Rita Keller is a nationally known CPA firm management consultant, speaker, author, mentor and blogger. She has over 30 years hands-on experience in CPA firm management, marketing, technology and administrative operations.

Stacy Kildal is the mom of two fantastic kids, an Advanced Certified QuickBooks ProAdvisor, Certified Enterprise Solutions ProAdvisor, Sleeter Group Certified Consultant, a nationally recognized member of the Intuit Trainer and Writer Network, and co-host of RadioFree QuickBooks.
Michael Alter's blog specializes in providing practical advice to those who seek greater profitability and practice management tactics that enhance deeper client relationships.

Sally Glick, CMO, Principal, Marketer of the Year in 2003 and AAM Hall of Famer in 2007, leads a lively discussion of the constantly expanding roles of marketing and the professional marketers that drive this initiative in accounting firms of all sizes.


The IMA Young Professionals Blog features the insights of IMA’s Young Professionals Committee. Committee members share advice and experiences on careers, continuing education, work/life balance, and other issues affecting young accounting and finance professionals.


FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI.


Sue Anderson has 30 years of experience in continuing education for accountants. Currently she is the program director for online CPE provider CPE Link.


Jim Fahey is COO of Apple Growth Partners, a regional CPA firm in Ohio. His focus is on the effective and efficient use of technology within the firm by all team members.

Caleb Newquist is the Editor-in-Chief of Sift Media US, overseeing content for both AccountingWEB and Going Concern.

Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of "The Yellow Book Interpreted" and owner of Yellowbook-CPE.com a website devoted to training for governmental auditors.


AccountingWEB is more than just a U.S. team of journalists and financial and technology experts - we have an international side, too! Members of our British team who publish AccountingWEB.co.uk share their ideas, insights, and perspectives from across the pond.