This Other Views commentary is excerpted from a speech by Elisse B. Walter, commissioner, Securities and Exchange Commission, before the Financial Accounting Foundation's 2012 annual board of trustees dinner May 22 in Washington.
Of course, in Basel, as well as in Beijing, my fellow regulators pressed me for the answer to the question that's probably on all of your minds this evening — what is the (Securities and Exchange Commission) going to do about (International Financial Reporting Standards)?
The staff expects to publish its final report under the (SEC's) work plan in a matter of weeks. Once we have time to evaluate the contents of the final staff report, my fellow commissioners and I will consider the next steps.
Our chief accountant (James L. Kroeker) and his staff, aided by others throughout the agency, have worked tirelessly executing this work plan. ...
The staff's reports and papers published over the past two-plus years have resulted in precisely the kind of data and analysis we need to help us evaluate the issues concerning further incorporation of IFRS into the U.S. capital markets.
Now, I recognize that this may not be the definitive answer that you or my fellow regulators abroad probably wanted to hear, but it's really the only answer that I can give at this time.
However, my personal view is that perhaps we should be answering a different question.
Everyone is asking whether, and when, the U.S. will incorporate IFRS. We should also be asking how the U.S. should continue its participation in the development of global accounting standards.
On that front, my view is that any decision to incorporate IFRS should include the (Financial Accounting Standards Board) determining to endorse newly issued IFRS standards following a robust due process by the (International Accounting Standards Board) that appropriately considers the U.S. perspective.
The FASB is best positioned to represent the U.S. interest in the IASB standard setting process and, thus, I believe it is critical for the FASB to play a substantial role throughout that process.
In addition, while most people are focusing on the staff's efforts under the work plan, I believe it is important to remember another aspect of this decision that was highlighted in the commission's statement from February 2010. It is critical that the FASB and the IASB continue to make satisfactory progress on the major convergence projects.
I continue to believe that high-quality, converged standards are vitally important to serving the best interests of investors in the increasingly global capital markets.
And, last but not least, a robust IFRS interpretive process and rigorous, coordinated application and enforcement of IFRS, will continue to be essential to make sure that investors receive the high-quality information they need ...
Today, as we focus on enhanced coordination among regulators based in different countries, we should not lose sight of the continuing importance of coordination among the standard setters and regulators within the U.S. — particularly in situations where the work of each regulator serves to foster high-quality financial reporting. I believe that we all should be working more closely together. ... n