Mutual recognition of IFRS financial statements in the US is a testament to the success of the convergence process
Berlin, Germany – June 20, 2007 – Deloitte global CEO James H. Quigley said today that governments and regulators must continue with genuine efforts to achieve consistency in the development and application of global financial reporting standards and a global reporting infrastructure in order to enhance protection for investors. Quigley, speaking from Berlin where leaders from Deloitte member firms gathered at the organization's annual World Meeting, pointed out that the increasing cooperation between the U.S. Securities and Exchange Commission (SEC) and the European Commission to facilitate mutual recognition of financial reporting standards in the U.S. and Europe is a significant step toward the advancement of a truly global reporting framework.
The SEC today agreed to a proposal to accept financial statements of "foreign private issuers" prepared in accordance with International Financial Reporting Standards (IFRS) without reconciliation to U.S. Generally Accepted Accounting Principles (U.S. GAAP). The SEC also suggested that it would explore the possibility of allowing U.S. companies to choose U.S. GAAP or IFRS. Similarly, the European regulators have undertaken an initiative to determine the "equivalence" of U.S. GAAP and IFRS.
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