Accounting Today - September 27 2010

produced by that process.
Spirit
FROM PAGE 16

those of American investors and our
economy. Our unanswered question
asks what huge benefits for the
American people would justify this
immense cost.

See SPIRIT on 19
WHAT ABOUT THE LAW?

We’ve made the following point numerous times before, but we’ll make it again because it doesn’t appear that Sir David fully comprehends it. Specifically, the U.S. could adopt IFRS and the IASB’s process only within the constraints created by our securities laws.

The most binding statute is Sarbanes-Oxley, which empowers the Public Company Accounting Oversight Board to identify the authorized standard-setter and then fund it through a mandatory fee levied on American public companies. Since the SEC first decided in the 1930s to rely on accounting professionals to define reporting standards, it can justify this unique dependence on a private sector body to create public regulations by exercising strong and active oversight. That is, the commission can satisfy Congress only by keeping a watchful eye on the standard-setter and its processes to ensure that it is not faltering in its mission because of its own failings or inappropriate pressure from outside parties.

Therefore, we present a second incontrovertible point:

ADOPTING IFRS UNDER
EXISTING U.S. LAW WOULD
REQUIRE THE IASB TO
SUBMI T TO SEC OVERSIGHT
AND ACCEP T ITS FUNDING
FROM THE PCAOB.

Of course, the IASB would never make such concessions.

This certain rejection means the SEC could adopt IFRS only by the hard route of persuading a recalcitrant Congress that U.S. interests would be promoted by amending both Sarbanes-Oxley and the Securities Acts that grant the commission authority to establish GAAP for filings by public companies. Those amendments would essentially do away with U.S. control over U.S. accounting practices and turn it over (with no strings attached) to an international body dependent on contributions, mired in an unproductive relationship with the EU, and with many constituents around the world whose political and economic interests are clearly not aligned with

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