The American Institute of Certified Public Accountants has written a letter to the Securities and Exchange Commission recommending the SEC take comprehensive steps to harmonize U.S. and international financial reporting, including allowing American public companies to report financial results using international accounting standards.
"The AICPA supports the goal of a single set of high-quality, comprehensive accounting standards to be used by public companies in the preparation of transparent and comparable financial reports throughout the world," said AICPA Chairman Randy G. Fletchall and President and CEO Barry C. Melancon in their comment letter to the SEC.
"We believe one common accounting language would benefit investors, as well as issuers and the capital markets, because it would facilitate the comparison of reporting entities domiciled in different countries," Fletchall and Melancon said in the letter.
The U.S. Securities and Exchange Commission is weighing whether to allow U.S. firms to report financial results using international standards (IFRS) rather than U.S. generally accepted accounting principles (GAAP). The AICPA recommended the SEC gather information on the likely number of public companies who would choose to issue reports using IFRS as part of a comprehensive SEC rulemaking based on responses to its current concept release.
Because IFRS are less detailed than U.S. GAAP, the AICPA encouraged the SEC to prepare for greater use of reasoned, professional judgment by CPAs in the application of IFRS.
The AICPA urged the SEC to solicit user feedback after giving U.S. issuers an IFRS option in order to gauge how well international accounting and reporting standards would meet U.S. investors' information needs and determine what, if any, adjustments may be needed.