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CAQ Home > Resources > SEC > SEC News and Items of Interest > SEC Votes to Seek Public Comment on Allowing Foreign Registrants to Use IFRS
SEC Votes to Seek Public Comment on Allowing Foreign Registrants to Use IFRS

At its open meeting on June 20, 2007, the SEC voted unanimously to propose for public comment amendments to accept financial statements prepared in accordance with the English version of International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB) without reconciliation to U.S. GAAP when contained in the filings of foreign private issuers (FPIs).  Here are some highlights of the meeting:

  • The Commission and the SEC staff (the Staff) agreed that the elimination of the GAAP reconciliation is one important step on the IFRS roadmap toward reaching international reporting convergence. 
  • This action is premised on IASB’s commitment to developing a high quality set of global standards.  The Staff expressed great confidence in the ability and commitment of the IASB and the FASB to work together for the common goal of reaching the best possible standards. 
  • Eliminating the GAAP reconciliation has the following potential benefits for investors:  1) expanded investment opportunities; and 2) improved comparability and enhanced confidence in the capital markets.  FPIs also stand to benefit from the proposed action through a reduction of reporting costs.
  • The Director of the Division of Corporation Finance, John White, noted that, although the IFRS Roundtable hosted by the Commission in March provided positive support for this step as well as very valuable input regarding pertinent questions on the roadmap, the Staff is very much interested in hearing a “broader set of comments” from the public. Once the proposal is published in the Federal Register, the public will have 75 days to comment.
  • The Staff indicated that we can expect a Concept Release this summer that would solicit public input on the future possibility of allowing domestic registrants to report under IFRS.

The Center for Audit Quality (CAQ or the Center) expects to issue a comment letter in response to both the proposal and the Concept Release referred to above as our objectives include both serving as a resource in gathering the views of member firms and preparing and issuing comment letters on rule proposals that impact auditors of public companies

To view the webcast of the open meeting, click on the respective link. For further information, please contact Michael Coco, Division of Corporation Finance, at (202) 551-3450 or Katrina A. Kimpel, Office of the Chief Accountant, at (202) 551-5300.