Rick Telberg of CPATrendlines and Michael Cohn of WebCPA were among the first to report yesterday that the National Association of State Boards of Accountancy (NASBA) filed a comment letter with the SEC on Feb. 19 (see (see NASBA letter) on the SEC's Proposed IFRS Roadmap. NASBA's letter concluded:
"NASBA recommends to the Commission that the [IFRS] Roadmap be withdrawn due to the concerns [addressed in NASBA's letter]. " The concerns listed by NASBA included the continuing need for the FASB and not letting it become, in NASBA's words, a 'rubber stamp' to the IASB; concerns about jurisdictional diferences in the adoption of IFRS; questions about sufficient guidance mechanisms for applying principles-based IFRS (e.g. compared to FASB's Emerging Issues Task Force in the U.S.; concerns about the IASB's independence, and concerns about the loss of sovereign power of the U.S. (e.g. through the SEC's direct oversight of the FASB, vs. an indirect role in the IASCF Monitoring Board) which NASBA says would "dilute [the SEC's] regulatory influence and impact on U.S. issuers;" concerns about the enforceability of IFRS standards, and concerns about the need to train accountants, owners, managers, investors, bankers currently in practice as well as those currently in college, to get up to speed on IFRS. Thus, NASBA recommended the SEC withdraw the IFRS roadmap at this time.
Moreover, NASBA stated, "To eliminate uncertainty for the U.S. issuers, investors, creditors and other members of the public, NASBA also recommends that the Commission’s withdrawal take place as early as possible."
The bottom line emphasized by NASBA was the need for convergence as a first step. Their letter stated: "NASBA urges the Commission to continue its support of the joint efforts of the IASB and the FASB to converge standards, to the extent possible, as they work to their target completion date of 2011."
NASBA's view is similar to that expressed by PCAOB Board Member Charles Niemeier, particularly at a New York State Society of CPA's conference last fall, in which he supported convergence, but raised concerns about a direct move to IFRS. Read more here.