Federal Issues

    Convergence of International and US Accounting Principles and IFRS 

    In response to worldwide demand from regulators, investors, businesses, and auditing firms for a single set of high-quality, globally-accepted accounting standards, more than 100 countries currently allow publicly-held companies to use International Financial Reporting Standards (IFRS) set by the International Accounting Standards Board (IASB) in London.

    The AICPA believes U.S. adoption of a single set of high-quality, globally accepted accounting standards will benefit U.S. financial markets and public companies by enabling preparation of transparent and comparable financial reports throughout the world. The AICPA is committed to providing the accounting profession with the information and tools, such as the Web site IFRS.com, needed to assimilate and implement a new set of standards.

    The AICPA is engaged in a healthy debate at the Securities and Exchange Commission over the best way for the U.S. to adopt such standards, if applicable. Based on member surveys, the Institute believes that a three- to-five-year timeline will be required for public companies and the accounting profession to successfully transition to IFRS. As a result, the AICPA has urged the SEC to set a “date certain” for any future IFRS adoption provided that certain key milestones are achieved.

    In the meantime, the AICPA supports continued “convergence” of specific accounting standards between IFRS and U.S. generally accepted accounting principles with the goal of substantial completion of work between the IASB and the Financial Accounting Standards Board (FASB) during 2013; a goal supported by the G-20.

    The AICPA further supports a permanent, independent funding mechanism for the IFRS Foundation, the governing body of the IASB. The AICPA encourages the SEC to use part of the current levy on U.S. public companies for accounting standard setting activities as a U.S. funding contribution to the IASB.

    SEC Authority

    The Securities and Exchange Commission has statutory authority over accounting standards used by companies whose shares are publicly traded on U.S. exchanges such as the New York Stock Exchange and the NASDAQ. In 2007, the SEC approved use of IFRS for U.S. financial reports filed by foreign publicly-held companies that use IFRS in their home country. The SEC took a first step toward allowing all U.S. public companies to use IFRS in early 2008 when it proposed a draft roadmap and timeline with key milestones for adopting IFRS. The SEC met on February 24, 2010, voting to issue a statement of its position supporting IFRS and convergence of U.S. and international accounting standards, and directing the staff to execute a Work Plan to assist the Commission in evaluating implementation of IFRS by U.S. companies. On July 13, 2012, the SEC issued its Final Staff Report on the Work Plan which did not provide a recommended course of action. The final decision regarding whether to incorporate IFRS into the financial reporting system for U.S. issuers now rests with the SEC Commissioners. There is currently no estimated date for when such a decision will be made.

    IFRS for Private Companies

    The International Accounting Standards Board (IASB) released its International Financial Reporting Standard for Small and Medium Entities (IFRS for SMEs) geared toward non-public company enterprises that in the U.S. are generally referred to as private companies. IFRS for SMEs is a self-contained global accounting and financial reporting standard applicable to the general-purpose financial statements of and other financial reporting by these entities. It is a modification and simplification of full IFRS aimed at meeting the needs of private company financial reporting users and easing the financial reporting burden on private companies through a cost-benefit approach. The AICPA governing Council recognized the IASB in 2008 as an international accounting standard setter, giving AICPA member CPAs the option of using and auditing IFRS or IFRS for SMEs for private companies.

    About IFRS

    International Financial Reporting Standards are accounting standards developed by the International Accounting Standards Board that are becoming the global standard for the preparation of public company financial statements. The IASB is an independent accounting standard-setting body that is the international equivalent of FASB, which sets U.S. generally accepted accounting principles. Like the FASB, the IASB follows a rigorous, open due process to develop standards and cooperates with national accounting standard setters around the world.

    The IASB consists of 15 members from nine countries, including the United States. It is funded by contributions from major accounting firms, private financial institutions and industrial companies, central and development banks, national funding regimes, and other international and professional organizations throughout the world. The IASB is governed by the IFRS Foundation.


    The AICPA publishes the Web site www.ifrs.com, the premier source for IFRS news and resources in the United States. The AICPA has developed a variety of courses, publications, articles and case studies to help Americans learn about IFRS and understand the changes, challenges and opportunities that a U.S. transition to IFRS will bring.

    For more information about IFRS, visit www.ifrs.com. Among other items, a list of frequently asked questions explaining IFRS and its applicability in the United States is available.

    AICPA News Releases 

    July 13, 2012 AICPA Applauds SEC's Effort to Review IFRS; Urges SEC to Act 

    October 18, 2011 Most U.S. CPAs Support Giving U.S. Public Companies Option to Adopt IFRS, Survey Finds

    August 17, 2011 AICPA Recommends SEC Allow Optional Adoption of IFRS by U.S. Public Companies

    Outside Resources

    SEC Final Staff Report on the Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers, July 13, 2012

    IFRS Foundation staff analysis of the SEC Final Staff Report, October 22, 2012

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    AICPA Letter to SEC on Proposed Regulation Crowdfunding

    Comment Letter AICPA comments on the SEC's proposed new Regulation Crowdfunding under the Securities Act of 1933 and the Securities Exchange Act of 1934 to implement the requirements of Title III of the JOBS Act as published in SEC File No. S7-09-13.
    Published on February 06, 2014

    Jan 2014 - AICPA Statement for the Record regarding Conferences and Travel

    Article AICPA provided a Statement for the Record to the Senate Homeland Security and Government Affairs Committee in  response  to the hearing held on January 14, 2014 entitled, "Examining Conference and Travel Spending Across the Federal Government."
    Published on January 28, 2014

    Cash Basis Letter to Senate Finance Committee from Associations-Jan7-2014

    Legislative Letters Cash Basis Letter to Senate Finance Committee dated Jaunary 7, 2014 from American Council of Engineering Companies, American Dental Association, American Farm Bureau Federation, American Institute of Architects, American Institute of CPAs and S Corporation Association.
    Published on January 22, 2014

    Municipal Advisors

    Issue Brief The AICPA generally supports the SEC’s proposed rules as a means to strengthen investor protections in the municipal securities market.  The AICPA is concerned, however, because the proposed rule would require that accountants performing customary and usual accounting services would be required to register as municipal advisors.
    Published on January 07, 2014


    Article Extensible Business Reporting Language (XBRL) used in financial and other reporting allows for easier access to more transparent information.  AICPA supports legislative proposals to utilize XBRL by companies, Federal agencies and recipients of Federal funds.
    Published on December 30, 2013

    ERISA Fiduciary Definition - Appraisers of Employee Stock Ownership Plans

    Article The AICPA believes that the U.S. DOL should implement rules that would require appraisers of ESOPs to meet minimum qualification requirements, including holding relevant credentials and training, and comply with applicable professional valuation standards.
    Published on December 30, 2013

    Take Action Legislation Affecting ESOP Appraisers

    Article The AICPA urges FVS section members to seek congressional support of legislation to fix DOL fiduciary proposal on ESOP appraisers S. 273/HR 2041.
    Published on September 18, 2013

    CPAs Count! Make Your Voice Heard on Capitol Hill.

    Overview The AICPA PAC is the profession’s political action committee. This describes frequently asked questions about the AICPA PAC.
    Published on July 30, 2013

    AICPA Letter to House and Senate Cosponsor S273 and HR2041

    Legislative Letters AICPA Letter to House and Senate Cosponsor S273 and HR2041
    Published on July 12, 2013

    AICPA Letter to U.S. House of Representatives Supporting H.R. 1564.

    Legislative Letters The AICPA supported a bill passed on July 8, 2013 by the U.S. House of Representatives which would prevent the PCAOB from imposing mandatory audit firm rotation for public companies.
    Published on July 12, 2013

    May 21, 2013 Letter in Support of H.R. 2061, the Digital Accountability and Transparency Act of 2013

    Comment Letter May 21, 2013 Letter in Support of H.R. 2061, the “Digital Accountability and Transparency Act of 2013”.
    Published on June 27, 2013

    May 22, 2013 Letter in Support of S. 994, the Digital Accountability and Transparency Act of 2013

    Comment Letter May 22, 2013 Letter in Support of S. 994, the “Digital Accountability and Transparency Act of 2013”
    Published on June 27, 2013

    March 12, 2013 Letter in Support of Federal Government Data Transparency

    Comment Letter March 12, 2013 Letter in Support of Federal Government Data Transparency
    Published on June 27, 2013

    AICPA Letter to House Financial Services Committee Supporting H.R. 1564.

    Legislative Letters The AICPA supported a bill approved on June 19, 2013 by the House Financial Services Committee that would prevent the PCAOB from imposing mandatory audit firm rotation for public companies.
    Published on June 19, 2013

    Audits of FHA-Approved Participants and Related HUD Requirements

    Article FHA proposes new rule to strengthen risk management and shift accountability for the underwriting of FHA-insured loans to the mortgage banks. It may no longer require FHA to approve loan correspondents (mortgage brokers) participating in the FHA program and HUD would no longer require FHA to submit audited financial statements or audits
    Published on May 14, 2013

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