The Securities and Exchange Commission plans to adopt both American and international accounting standards. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke defended the SEC’s decision, saying that converging the accounting methods would help allow foreign companies to do business in the United States, according to CFO.
The integration is being pushed by SEC Chairman Christopher Cox. Massachusetts Congressman Michael Capuano, a member of the House Financial Services Committee, believes that the timing of the integration is poor. Capuano is particularly concerned that the transition of accounting standards is occurring at a time when the financial markets are fickle.
Paulson emphasized the need to help foreign companies conduct business in the U.S. Paulson told CFO, “There are different accounting regimes with different standards and different requirements. That doesn’t make them worse than ours. We’ve had plenty of issues with our accounting regime.” Paulson disagrees with Capuano, saying that convergence should also be thought of as outsourcing American standards.
Bernanke stressed that the Financial Accounting Standards Board and the International Accounting Standards Board have made efforts to allow foreign companies to operate in the U.S. without having to meld together two separate accounting methods. “I don’t think it causes any major problems with our accounting system or regulatory system,” Bernanke told CFO.