The Securities and Exchange Commission (SEC), as stated in an August 2008 "roadmap proposal," wants to set aside U.S. Generally Accepted Accounting Principles (GAAP) in favor of the international standards followed by most of the world.
The call to replace U.S. GAAP with International Financial Reporting Standards (IFRS) by 2014 would represent one of the biggest-ever accounting rule changes for public companies based in the U.S. Among other issues, it would likely displace the Financial Accounting Standards Board, or FASB, as the U.S.'s chief accounting authority, subsuming it under the London-based International Accounting Standards Board (IASB).
But there are some tough questions about the move that have yet to be answered, according to Wharton accounting professor Luzi Hail, who, with professors Christian Leuz from the University of Chicago and Peter Wysocki of MIT's Sloan School of Management, recently conducted research on the potential impacts of the change.
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