If, at some point in the future, U.S. companies adopt international financial reporting standards (IFRS) in place of U.S. generally accepted accounting principles (GAAP) as Donald Nicolaisen, former chief accountant at the Securities and Exchange Commission recommended last week at the SEC roundtable, the future standards setting role of the Financial Accounting Standards Board (FASB) may be substantially changed, according to a comment in CFO.com.

The success of FASB’s and the International Accounting Standards Board’s (IASB) joint convergence project which has led to the SEC’s acceptance of IFRS for non-U.S. registrants by 2009 could also lead to unanticipated consequences for IASB.

Arthur Levitt, Jr., former chairman of the SEC, in a Wall Street Journal opinion argues that FASB and the Government Accounting Standards Board (GASB) today are losing their independence and must be reconfigured. He emphasizes the importance of US GAAP to the strength of U.S. capital markets in the global economy, and the need to have relevant standards.

Nicolaisen wants the SEC to permit U.S. companies to replace U.S. GAAP with international accounting standards, MarketWatch.com reports, saying that “a single standard” for worldwide accounting benefits both companies and investors. The single standard might well be the IFRS, according to other panelists, including J. Phillip Jones, director of external reporting at DuPont, because they are more principles-based, CFO.com reports.

An earlier panel recommended that U.S. companies be allowed to choose between the two standards, and John White, director of the SEC’s Division of Corporate Finance, said that SEC Chairman Christopher Cox has hinted that U.S. companies may have this option, CFO.com reports.

Nicolaisen said that he thought it would be a mistake to allow U.S. companies to choose between the two standards.

As an example of the turn to complexity that FASB has taken recently, Levitt cites FAS 133, Accounting for Derivatives, now an “800-page treatise,” which continues to grow. He sees the influence of lobbying groups and constituency groups weighing on the quality and timing of standards setting at both FASB and GASB.

Although Sarbanes-Oxley created an independent funding mechanism for FASB, both boards still need donations from their constituents, Levitt writes in the Journal. “Congress should also create an independent source of funding for GASB.” He recommends further that “FAF trustees should be appointed by the SEC in an open nomination process.” “The result of these changes should be accounting rules that are less complex and more relevant,” he says. “It’s an approach that we should undertake not only here in the U.S., but among our international standard setters as well.”