U.S. leadership position among accounting bodies at stake if progress toward IFRS, convergence stalls, Melancon warns

BY KIM NILSEN

The U.S. must keep pushing for convergence of U.S. GAAP and international standards, AICPA President and CEO Barry Melancon urged in a speech Monday.

Melancon, addressing the AICPA governing Council, raised concerns that support is waning for convergence of international standards and U.S. GAAP, with talk of comparability rather than convergence bubbling from the U.S.

FASB and the International Accounting Standards Board (IASB) are responding to different stakeholders and are having some difficulties agreeing on a harmonized approach to certain projects, he said.

One example: FASB in July decided to take a step back from the so-called “three-bucket” impairment model the boards had been developing for financial instruments. FASB is separately developing a “Current Expected Credit Loss” (CECL) model.

With convergence in question, SEC action on IFRS adoption is also uncertain. The SEC made the convergence progress by FASB and the IASB one of the milestones upon which the commission will base its IFRS decision.

The U.S. could face consequences for not pushing steadily forward on convergence and adopting IFRS, Melancon warned. Ramifications could include waning influence among accounting standard bodies. Also in question is whether the U.S. would have a seat at the table in a new forum of international accounting bodies the IASB is expected to create.

“The world is watching,” Melancon said. “The world is very much aware of the U.S. stepping back.”

—Kim Nilsen ( knilsen@aicpa.org ) is executive editor for the JofA.

Photo: Ken McCray Photography

SPONSORED REPORT

Questions to ask before committing to the cloud

Cloud computing has its pros and cons. In this report, we answer common questions CPAs may have as they consider transitioning partially or fully to the cloud.

QUIZ

News quiz: IRS reopens an online service, but criticism endures

The IRS brings back the Get Transcript Online service, but the agency faces criticism for its handling of the aftermath of the event that led to the shutdown of the service. See how much you know about other recent news with this quiz.

CHECKLIST

Auditing risks in culture

Cultural flaws can seriously damage an organization. Here’s how internal auditors can reduce risks by embedding culture audits into existing audit programs.