John White, the SEC's Director of the Division of Corporation Finance, tried to assuage international concerns about the SEC's role in the IFRS last week. In a speech to the Practising Law Annual Institute on Securities Regulation in Europe White discussed foreign private issuer deregistration (see my prior postings here and here), SOX Section 404 implementation, and the SEC's review process for IFRS. The speech is available here.
White explained by process by which Corp Fin reviews filings for issuers using the IASB's IFRS. This review process is similar to the review process used for domestic filers. Initial comments from the staff are normally just in the nature of informational requests. White stated, "our initial comments do not seek to change anyone's accounting." He also commented that "we are not seeking to be the last word on IFRS in the international arena" and "[b]ecause there seems to be considerable unease on this point in some quarters, I want to be very clear that in commenting on IFRS financial statements, the SEC staff is not trying to commandeer IFRS."
Finally, White discussed the convergence of IFRS and GAAP, noting that currently foreign private issuers must do a reconciliation of their financial statements to U.S. GAAP if IFRS or another country's GAAP was used to prepare the financials. White noted that it is not the SEC's goal to pressure the IFRS to mimic U.S. GAAP. It is possible that a reconcilation of IFRS and U.S. GAAP will be accomplished by 2009 and the SEC is working closely with regualtors from around the world on this.