SEC To Hold Hearing on IFRS, GAAP Role in U.S. Stock Market Declines
AICPA | July 31, 2008
Washington (July 31) – The Securities and Exchange Commission plans a hearing Aug. 4 to analyze the performance of International Financial Reporting Standards versus U.S. generally accepted accounting principles during the U.S. credit crunch and subprime mortgage meltdown.
"We are particularly interested in how the two sets of standards dealt with the key accounting issues in the subprime crisis, including off-balance sheet entities and fair value," said SEC Chairman Christopher Cox an a statement announcing the hearing.
The SEC is weighing whether to allow U.S. companies to report income and balance sheet information to investors using International Financial Reporting Standards (IFRS) instead of U.S. accounting standards. Meanwhile, the stock market has swooned as subprime losses hit Wall Street banks. Since setting a high of 14,164 in October 2007, the Dow Jones Industrial Average, a broad measure of 30 blue-chip companies, has declined 18.8 percent to the 11,500-range in recent days.
Investors, issuers, auditors and other financial reporting experts have been asked to speak at the hearing, which will consist of two panels and is open to the public, according to the SEC. Financial Accounting Standards Board and International Accounting Standards Board representatives will be present as observers, the SEC said. U.S. GAAP is defined by Norwalk-based FASB and IFRS are set by the London-based IASB.
Two newly appointed Democrat commissioners joined the SEC this month. Luis Aquilar, a former partner at law firm McKenna Long & Aldridge LLP in Atlanta was sworn in July 31. Elisse Walter, a former senior executive vice president at the Financial Industry Regulatory Authority (Finra), was seated July 9.
View the official SEC press release here, and listen to the live event by visiting the SEC site on the day of the event.
