From AAO Weblog

Nearly two years ago, then-chief accountant Don Nicolaisen outlined a “roadmap to convergence” between United States generally accepted accounting principles and those embodied in the International Financial Reporting Standards as issued by the International Accounting Standards Board.

On March 6, the two sets of standards might move a few steps closer.

That’s when the SEC will hold one of its roundtables, this one specifically about the need to eliminate the reconciliation of IFRS-prepared statements to their likeness in US-based generally accepted accounting principles.

The roundtable will be composed of three panels, deigned to discuss how eliminating the differences between the two sets of standards will:

* affect the capital-raising process in the US capital markets;

* affect issuers in the US capital markets; and

* affect investors in the US capital markets.

No panelists named yet, nor any more specifics about the topics.

* * * * * * * * * * * *

Other, less encouraging SEC news reported here in the International Herald Tribune and in the New York Times. It seems that “Last Friday, the commission filed a little-noticed brief in the Supreme Court urging the adoption of a legal standard that would make it harder for shareholders to prevail in fraud lawsuits against publicly traded companies and their executives. At the same time, the agency’s chief accountant said at a conference that it was considering ways to protect accounting firms from large damage awards in cases brought by investors and companies.”

According to the article, the chief accountant says “potential claims against some firms were now so large that they could lead to bankruptcy and force further consolidation in an industry that is already heavily concentrated.”

Where are the numbers? It’s hard to buy into a statement like that without some proof. It’s like all the talk about the prohibitive cost of Section 404 reviews for non-accelerated filers -since they’ve never done the work, it’s hard to buy into their argument.

The most recent judgment against an accounting firm that I can recall had to do with KPMG for its part in selling illegal tax shelters – not from frivolous investor lawsuits. This issue seems to be being drummed up here to synch with the movement in Europe to limit auditor legal liability, rather than stemming from some real danger that a domestic firm could be put out of business from rapacious lawsuits. That’s another kind of convergence that investors should hope doesn’t happen. This version of the SEC does not seem to have investor interests at the top of its agenda.

http://www.accountingobserver.com/blog/

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