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SEC Staff Rips IFRS Adoption, But No Recommendation Made

A staff report from the SEC could spell the end for IFRS adoption in the Unite

After years of deliberation and debate, a staff report from the Securities and Exchange Commission has all but eliminated the possibility of International Financial Reporting Standards being adopted in the United States.

Over the course of its 127-page report, the SEC staff expressed its many reservations regarding the accounting standards, including potential gaps in its comprehensiveness and the possibility that spotty coordination between regional regulators would make it less likely that financial reports would be comparable from jurisdiction to jurisdiction. It did not, however, go so far as to make a recommendation to the SEC, but some experts think that doesn't matter.

"The SEC essentially had zero likelihood of choosing (full-scale) adoption," Bruce Pounder, director of professional programs for a firm that provides education for accountants, told Reuters. "The influence that the SEC would have over IASB, even under the most cordial of relationships, is clearly not at the level that Americans would be comfortable with."

The report was met with dismay from some international agencies. Hans Hoogervorst, chairman of the International Accounting Standards Board, noted that more than 100 countries and two-thirds of the G20 had already adopted the standards, and that continued resistance from the United States would lessen its influence over the accounting body. IFRS Foundation Chairman Michel Prada, meanwhile, criticized the report for finding fault with the standards, but not recommending an action plan for their adoption.