Chairman Schapiro has said that we would soon turn to the proposed IFRS Roadmap, and we are doing just that. At this stage in our review process, I expect we will likely consider further action sometime in early 2010
She noted that over 200 comment letters were received on the proposed IFRS roadmap published last year, and that:
We are, as always, carefully reading all of these responses — most of them, more than once. The comment letters raise a number of complex issues, including issues related to the workability of various aspects of the proposed approach. We are very thankful to all who took the time to share their knowledge and experience with us.
Regarding the potential role of the FASB in a converged world, she said:
one significant issue raised in the comment letters — whether there is a continuing role for the FASB if we move to one set of global accounting standards. FASB has been instrumental in helping to make the vision of global accounting standards start to become a reality. I will, of course, keep an open mind on these issues, but, to say the least, I am eager to explore the continuing role of FASB in the event global standards are adopted.
In her introductory remarks, Walter reviewed the history of the interaction of the accounting profession and the Commission, and noted not only that she formerly was a deputy director in SEC's Division of Corporation Finance in the 1980's and early 1990's, but also that she was a math major and her father was a CPA who served as CFO of a public company.
Other major topics, in addition to IFRS, covered in Walter's remarks included independence in setting accounting standards, and "accountants as gatekeepers." Some excerpts:
Independence in setting accounting standards
I believe that any and all regulatory reform measures undertaken by Congress and the Administration must maintain the process for setting accounting standards as an independent function. Oversight of the independent private-sector standard setter should not become entangled with other regulatory priorities, such as addressing systemic risk....
Of course the price for independence is that standard setters must be accountable for their work. Accounting standards must keep pace with the real world to stay relevant, must be refined over time to address weaknesses, and must continue to be reviewed to identify improvements.
Accountants as gatekeepers
See Walter's speech for her complete remarks.
Even as the Commission considers these important initiatives intended to improve the nature and quality of financial reporting for investors and the efficiency of our markets, the Commission also remains keenly focused on other needed changes in regulation. Here, too, accountants are front and center because of the role they play as important gatekeepers.
While the Commission's staff reviews filings, conducts inspections of certain market participants, and performs other oversight activities, these functions do not include a detailed review of all financial information at the level conducted by the accounting profession. The integrity of the financial reporting system, therefore, relies heavily, as it must, on you to be primarily responsible for the large volume of financial information that undergirds the Commission's full disclosure system.
Separately, if you want to read another opinion about accountants as gatekeepers, see Francine McKenna's post yesterday, They Weren't There: Auditors and the Financial Crisis, in her blog, Re: The Auditors.
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