Standard Bearer – Brief Article
GRANTED, IT’S NOT AS HEATED OR CONFUSING as the debate over who won the election for President. But taking a set of financial reports prepared under one country’s standards and reconciling them to the accounting principles of another can be as nervewracking as deciphering the intent behind a pregnant chad. There are about as many standards as there are countries, and companies with global ambitions can end up applying several of them at once. Creating a universal set of accounting rules, everyone agrees, would make it easier to raise capital around the world.
But the obstacles to settling on a single set of accounting standards are formidable. As CFO Asia managing editor Tom Leander points out in “The Great Debate” (page 38), U.S. companies charge that international accounting standards (IAS)-the closest thing to universal standards–are neither as transparent nor as well enforced as U.S. generally accepted accounting principles. These critics fear that foreign companies will gain undue advantage if they can raise money in the United States under IAS rules instead of under GAAP. In turn, foreign companies bristle at the notion of having to bow down to U.S. GAAP.
Recently, however, there have been signs that the debate is slouching toward resolution. Appointing former Federal Reserve Board chairman Paul Volcker to oversee the restructuring of the IAS Committee is perhaps the most promising signal. Volcker possesses both the authority and the judgment to appease collective fears while pushing for a resolution. Too bad he’s not Presidential Election Commissioner.
COPYRIGHT 2000 CFO Publishing Corp.
COPYRIGHT 2000 Gale Group