Issues the SEC must Consider before Adopting IFRS
Student Question: Describe some of the issues the SEC must consider in deciding whether the united states should adopt IFRS. Can you help me with the extra notes on this subject.
Issue 1 – Economic Cost of the Transition
If the USA were to adopt international accounting standards over GAAP, it would require all public companies to change their internal accounting practices. This means that accounting software and existing financial data would need to be replaced to meet IFRS requirements. The economic cost of such as transition would amount to billions of dollars in additional operating expenses.
Issue 2 – Professional Training
Switching to IRFS means that most training received by certified public accountants (CPAs) would become obsolete. These professionals would need to overhaul their training to learn the differences between the two systems.
Issue 3 – Political Implications
The U.S.A. has always maintained a level of pride when it comes to independence from European culture. If IFRS were to be adopted, political leaders are likely to create roadblocks based on the perceived loss of domestic control of accounting standards.