Finance Firms Favor Global Accounting

SEC’s Shapiro says regulators' work on convergence will continue into 2012.

Major financial firms and credit ratings agencies are pushing the U.S. Securities and Exchange Commission to blend U.S. and international accounting standards into one set of practices.

At a roundtable meeting on accounting standards in Washington today, SEC Chairman Mary Schapiro called the idea “a major decision for this agency, and not one to be taken lightly.”

Regulators were originally supposed to finish the convergence work by last month. It’s now expected to go “into the first or second quarter” of next year, Schapiro said in an interview.

Representatives of Morgan Stanley, Allstate Corp., Moody’s Corp. and McGraw-Hill Cos.’ Standard & Poor’s unit who took part in the roundtable argued that differing accounting standards pose difficulties for international businesses.

“Diverse languages are great for human culture but are troublesome, obviously, for us analysts,” said Gregory Jonas, a Morgan Stanley managing director, who advocated a gradual U.S. transition toward International Financial Reporting Standards. “Let’s not do something that undermines the positive momentum we have today.”

The SEC, which oversees U.S. accounting regulation, has agreed to develop a plan to converge U.S. and international standards. The agency published report in May that said it “has yet to make a decision as to whether and, if so, how, to incorporate IFRS into the financial reporting system for U.S. issuers.”


Investor Information
“Our primary focus will be to ensure that investors have the information they need,” Schapiro said at today’s meeting.

“We do support the adopting of a single global account framework,” said Kevin Spataro, senior vice president at Allstate Corp., saying that the international standards “could fill that role.”

Some smaller companies based entirely or mostly in the U.S. are concerned about the difficulty of an accounting system change.

“There’s really not a benefit to us to switch,” said Charlie Rowland, chief financial officer of Exton, Pennsylvania-based ViroPharma Inc. “There’s no efficiency; there’s no cost savings.”


Bloomberg News

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