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In a pointed challenge to many of his colleagues in the accounting profession and at financial regulatory agencies, Charles Niemeier, a member of the Public Company Accounting Oversight Board, said that adopting the International Financial Reporting Standards and scrapping
Niemeier, who made his comments during a
“The idea is not convergence; it’s capitulation”, he said. As is often the case when senior regulatory agency officials speak, Niemeier added that his remarks represented only his own point of view and not that of the PCAOB.
Niemeier’s chief concern was that his counterparts at the Securities and Exchange Commission (SEC), who recently approved a plan to permit
Niemeier took issue with the notion that U.S. GAAP is out of date and that the principles-based financial reporting regime under IFRS would somehow represent an improvement to the rules-based system under GAAP. Some companies that have become accustomed to the prescriptive guidance in GAAP may have difficulty adjusting to the apparently greater reliance upon the judgment of the statement preparer and auditor under IFRS.
He worried that the adoption of IFRS could pose an obstacle for auditors when they challenge a statement preparer’s assumptions with certain pieces of guidance.