Comments on SEC Proposed Rule on 'Roadmap for Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards (IFRS) by U.S. Issuers'

64 Pages Posted: 22 Jun 2009

See all articles by Shyam Sunder

Shyam Sunder

Yale University - School of Management; Yale University - Cowles Foundation

Date Written: April 17, 2009

Abstract

The Securities and Exchange Commission solicited comments on its proposed roadmap toward requiring U.S. registrants to use International Financial Reporting Standards (IFRS) in preparing their financial reports. The proposal is based on “consideration of the role a single set of high quality accounting standards plays in investor protection and the efficiency and effectiveness of capital formation and allocation.” These comments question the validity of this assumption and point to the disadvantages of a monopoly set of standards. Shifting from the monopoly of the Financial Accounting Standards Board to the International Accounting Standards Board is dominated by a competitive regime in which two or more regulator-approved standard setters compete for royalty revenues from registrants who choose the standards used to report to their stakeholders. Regulatory competition will allow experimentation, comparison, and learning and therefore lead to better financial reporting over time.

Keywords: Accounting standards, internationa, IFRS, Securities and Exchange Commission

JEL Classification: M41, M44, M47

Suggested Citation

Sunder, Shyam, Comments on SEC Proposed Rule on 'Roadmap for Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards (IFRS) by U.S. Issuers' (April 17, 2009). Available at SSRN: https://ssrn.com/abstract=1408706 or http://dx.doi.org/10.2139/ssrn.1408706

Shyam Sunder (Contact Author)

Yale University - School of Management ( email )

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-6160 (Phone)

HOME PAGE: http://www.som.yale.edu/faculty/sunder/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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