SEC Chair Mary Jo White on Jan. 5, 2017, issued a statement that said, “I remain firmly convinced of the importance for U.S. investors of high-quality, globally accepted accounting standards, and I believe that the commission must continue to pursue such standards as one of its highest priorities.”
The 1,600-word statement called U.S. support of IFRS “imperative for the protection of U.S. investors and companies and the strength of our markets.”
The practical effect of White’s statement is unclear, given that she released it two weeks before she plans to conclude her four year-term and that, after emphatically stating her support for IFRS early in her tenure, largely gave up on the issue during her final year. President-elect Donald Trump has nominated New York lawyer Jay Clayton to succeed White, but Clayton’s views on IFRS have not been made public.
“I strongly urge the next chair and commission to build on our past efforts and give the goal of high quality globally accepted accounting standards the focus and support this critical issue deserves,” White said.
White’s statement follows by a month the speech Chief Accountant Wesley Bricker gave at the AICPA Conference on Current SEC and PCAOB Developments in Washington, where he called for the SEC to resume consideration of a rule that would let U.S. companies submit IFRS financial data as supplements to their regulatory filings with financial statements prepared in U.S. GAAP.
At the time, Bricker said he did not expect the SEC to take up the issue in the near future.
White’s statement also sets what has to be an interesting tone for her successor. The SEC has batted around the issue of international accounting standards for 30 years and was instrumental in the 2001 establishment of the IASB. But more recently, under the leadership of White and Mary Schapiro from 2009 to 2012, the SEC’s support for IFRS has stalled. After Schapiro had been at the SEC for a year, she authorized the publication of Release No. 33-9109, Commission Statement in Support of Convergence and Global Accounting Standards, which reviewed the SEC's actions with regard to IFRS and the challenges the agency faced in adopting a rule that would expand the use of international reporting standards in the U.S. A series of staff reports were released during the next two years that expanded on the statement and outlined some difficulties that would be encountered if U.S. companies were to use IFRS more extensively.
Schapiro stepped down five months after the final report was issued and never made an IFRS rule a priority during her tenure.
White had far more interest in IFRS than Schapiro, and she appointed James Schnurr, a former Deloitte & Touche LLP partner who was a strong advocate of IFRS, as chief accountant. Schnurr said several times during his 18-month tenure that he was working on a rule proposal, but the effort went nowhere. In November, Schnurr departed and was replaced by Bricker.
Now the issue is expected to be in the hands of Clayton, once he is confirmed by the Senate.
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