SEC REPORTED ON WORK PLAN FOR GLOBAL ACCOUNTING STANDARDS

The SEC has published their first report on their quest to develop global accounting standards. The following is an excerpt from the SEC web site:

Washington, D.C., Oct. 29, 2010 — The Securities and Exchange Commission's Office of the Chief Accountant and Division of Corporation Finance today published their first progress report on the Work Plan related to global accounting standards.

The Commission directed agency staff earlier this year to execute the Work Plan to provide the information needed to evaluate the implications of incorporating International Financial Reporting Standards (IFRS) into the financial reporting system for U.S. issuers. The Commission indicated that following successful completion of the Work Plan and the convergence projects of the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB), it will be in a position in 2011 to determine whether to incorporate IFRS into the U.S. financial reporting system.

"The staff has invested significant time and effort in executing the Work Plan, and we've made great progress to date," said SEC Chief Accountant Jim Kroeker. "This progress report emphasizes the importance of transparency in the staff's activities, and can help the public's understanding of the magnitude of this project and the staff's progress."

The Work Plan addresses six key areas:

Sufficient development and application of IFRS for the U.S. domestic reporting system.
The independence of standard setting for the benefit of investors.
Investor understanding and education regarding IFRS.
Examination of the U.S. regulatory environment that would be affected by a change in accounting standards.
The impact on issuers both large and small, including changes to accounting systems, changes to contractual arrangements, corporate governance considerations, and litigation contingencies.
Human capital readiness.
The SEC staff expects to continue to report periodically on the status of the Work Plan in 2011."

Global Accounting Standards seems like something every would agree is needed in a global economy. The establishment of enforced Global Accounting Standards would in theory save governments and businesses a tremendous amount of money. Getting some nations to sign on to such standards might be a problem since every nation thinks that their way at doing anything is the best way. Changing accounting practices in the U.S. to reflect the practices in other nations might in fact be difficult since we have such a huge economy.