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FINANCIAL REPORTING

SEC plans to consider whether global standards are achievable

 

By Ken Tysiac
February 3, 2014

The SEC plans to consider whether a single set of high-quality global accounting standards is achievable, according to one initiative described in a draft of the commission’s strategic plan for 2014 to 2018.

An initiative described on page 8 of the 39-page document, which was released Monday, says the SEC will continue to promote the establishment of high-quality accounting standards by independent standard setters. In its oversight of FASB, the SEC plans to strengthen the board’s independence and maintain its focus on the needs of investors in financial reporting, according to the draft.

The agency also plans to promote higher-quality financial reporting worldwide and will consider whether a single set of global standards is achievable, the document says. The document does not specifically mention IFRS.

After years of study, the SEC has yet to vote on whether to allow or mandate adoption of IFRS for U.S. public companies. In December, SEC Chief Accountant Paul Beswick said rule-making duties related to federal legislation have prevented the SEC from devoting time to deciding on the future of IFRS in the United States.

The draft strategic plan released Monday also said the SEC will continue its work to foster high-quality audits through its oversight of the PCAOB and its regulation of auditors through the PCAOB’s inspection and disciplinary programs.

Four overarching goals are described in the draft to guide the commission in its mission to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.

The draft, released Monday, would establish the following strategic goals for the SEC:

  • Establishing and maintaining an effective regulatory environment.
  • Fostering and enforcing compliance with the federal securities laws.
  • Facilitating access to the information investors need to make informed investment decisions.
  • Enhancing the SEC’s performance through effective alignment and management of human, information, and financial capital.


In the draft, the SEC acknowledges that financial markets have become increasingly dispersed and complex in recent years. Meanwhile, the SEC’s role has expanded significantly as a result of legislation such as the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, and the Jumpstart Our Business Startups Act, P.L. 112-106.

Public comment on the draft will be accepted through March 10 and can be made at performanceplanning@sec.gov.

Ken Tysiac (ktysiac@aicpa.org) is a JofA senior editor.

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