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SEC eliminates reconciliation requirement for foreign companies; AICPA recommends SEC use international accounting standards.

In Nov. 2007, the Securities and Exchange Commission unanimously approved a proposal that no longer requires foreign registrants to reconcile their financial statements with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records.

Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting
, as long as they use international financial reporting standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB).

Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS).
 as issued by the International Accounting Standards Board An editor has expressed concern that this article or section is .
Please help improve the article by adding information and sources on neglected viewpoints, or by summarizing and
. The rule amendment will be effective 60 days after publication in the Federal Register and apply to financial statements for years ended after Nov. 15, 2007. The AICPA AICPA

See American Institute of Certified Public Accountants (AICPA).
 supported this change in congressional testimony in Oct.

The AICPA had recommended the SEC take comprehensive steps to harmonize U.S. and international financial reporting, including allowing American public companies to report financial results using international accounting standards. The SEC is weighing whether to allow U.S. firms to report financial results using international financial reporting standards rather than U.S. GAAP. The AICPA recommended in a comment letter that the SEC gather information on the likely number of public companies that would choose to issue reports using IFRS as part of a comprehensive SEC rulemaking based on responses to its current concept release. The AICPA urged the SEC to solicit user feedback after giving U.S. issuers an IFRS option to gauge how well international accounting and repotting standards would meet U.S. investors' information needs and determine what, if any, adjustments may be needed. The Center for Audit Quality also submitted a comment letter to the SEC in which it suggested that, "the Commission should develop a comprehensive plan, with appropriate timetables and a date certain, for moving all U.S. domestic registrants to IFRS."
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Publication:CPA Letter
Date:Jan 1, 2008
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