The Securities and Exchange Commission has proposed that U.S. companies should be given the choice between International Financial Reporting Standards (IFRS) and U.S. generally accepted accounting principles (GAAP).  Reaction to this proposal has been mixed.  The AICPA has come out in support of this move, while the PCAOB is split on the matter.

The American Institute of Certified Public Accountants told a U.S. Senate panel that American public companies should be allowed to report their financial results using international accounting standards. "The AICPA supports the goal of a single set of high-quality, comprehensive accounting standards to be used by public companies in the preparation of transparent and comparable financial reports throughout the world," Charles E. Landes, Vice President for professional standards and services at the AICPA, told a hearing of the Senate Banking Subcommittee on Securities, Insurance, and Investment.

The Financial Accounting Standards Board and the International Accounting Standards
Board have made tremendous strides in harmonizing accounting standards already and the SEC is taking a leadership role, Landes said. "The debate or question should no longer be whether we move to convergence of high quality accounting standards, but how soon we can accomplish convergence," Landes said.

The proposal is not without its critics, though. Some PCAOB advisers are worried that such a choice would overly burden accounting professors who are already strapped for resources. They also questioned whether the International Accounting Standards Board's version of IFRS is of high enough quality to meet U.S. regulators' and investors' expectations. The IASB expressed similar worries.

Big 4 accounting firms, however, assured the advisory group that they have been training their staffs on using IFRS. Perhaps surprisingly, a member of the Financial Accounting Standards Board spoke in favor of a move to international standards.  Stay tuned for more details as this proposal moves forward.