Calling the risks of not moving forward with IFRS for U.S. issuers “simply too great,” SEC Commissioner Kathleen Casey said the SEC “must decide to incorporate IFRS for U.S. issuers.”
Addressing the Society of Corporate Secretaries and Governance Professionals’ 65th Annual Conference on Wednesday, Casey said that the SEC “can no longer kick the can down the road,” with regard to IFRS adoption.
“In the absence of a credible step by the United States to increase its use of IFRS, our ability to influence IFRS and thus ensure their continued quality and comparability will quickly dissipate,” Casey added. “History has shown us that, in the absence of U.S. involvement and leadership, carve-outs and divergence by individual nations from IFRS begin to emerge.”
“Furthermore, U.S. involvement with IFRS ensures that work will continue between IFRS and U.S. GAAP, thus maximizing comparability between the two systems.”
According to Casey, smaller issuers and other companies that have no international operations should be allowed to opt out of IFRS and continue with U.S. GAAP, at least initially. “Providing optionality would preserve the benefits of IFRS, ensure continued U.S. influence in the development and preservation of IFRS and avoid unnecessary costs for smaller U.S. issuers.”
The decision the SEC will make on IFRS is “a critical one and it is being closely watched by other jurisdictions around the world,” Casey said. “In this area, our global leadership still matters greatly. I hope we rise to the challenge and continue to lead.”
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