Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Accounting Plan Would Allow Use of Foreign Rules
Old 07-05-2008, 09:10 AM   #1
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
Accounting Plan Would Allow Use of Foreign Rules

Just because the game isn't hinky enough..

Quote:
The [Securities and Exchange] commission is preparing a timetable that will permit American companies to shift to the international rules, which are set by a foreign organization and give companies greater latitude in reporting earnings. Companies that have used both domestic and overseas rules have, on average, been able to report revenues and earnings that were 6 percent to 8 percent higher under the international standards, according to accounting experts.

Though foreign accounting standards are stronger in some ways than American accounting principles, they are weaker in some important areas. They enable companies, for example, to provide fewer details about mortgage-backed securities, derivatives and other financial instruments at the center of today’s housing crisis and that have troubled many Wall Street firms, including Bear Stearns.

The shift to international standards could also wind up eliminating the conflict-of-interest rules, adopted after the collapse of Arthur Andersen and Enron, that have limited auditors from performing both accounting work and consulting for the same client.

James D. Cox, a securities law expert at Duke Law School who returned this week from teaching corporate law in Europe, said the shift to international rules amounted to “outsourcing safety standards.”

“We would not for a moment tolerate having American auto safety standards set by China or India,” he said. “Why should we do it for financial safety standards? There has to be some accountability.”

The S.E.C. also plans to announce details of a pilot program that would enable foreign brokers to deal directly with American investors, while continuing to be largely regulated by the foreign country. The first country in the program will be Australia, although officials hope to eventually include other countries.
http://www.nytimes.com/2008/07/05/business/05sec.html
__________________

__________________
ladelfina is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-05-2008, 10:01 AM   #2
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
hey, it if works, change it it will work better! Better for who (or is it whom) is the real question?
__________________

__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 07-06-2008, 10:13 PM   #3
Thinks s/he gets paid by the post
Finance Dave's Avatar
 
Join Date: Mar 2007
Posts: 1,046
I am a member of the IMA (Institute of Management Accountants). Actually I was President of a local chapter last year. At our annual meeting in June 2008 we had a speaker from the SEC on this issue.

IMO, this is a long-needed move.

Dave
__________________
Finance Dave is offline   Reply With Quote
Old 07-06-2008, 10:47 PM   #4
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
Finance Dave, why?
Because it is better for corporations?
Because it is better for investors?
Explain! (please.. thanks!)
__________________
ladelfina is offline   Reply With Quote
Old 07-07-2008, 05:56 AM   #5
Thinks s/he gets paid by the post
Rambler's Avatar
 
Join Date: Jul 2007
Posts: 2,250
Quote:
Originally Posted by ladelfina View Post
Finance Dave, why?
Because it is better for corporations?
Because it is better for investors?
Explain! (please.. thanks!)


one reason is that your comparisons between international and US corps will be more of the apples to apples variety. My megacorp is European, but we use US-GAAP for our accounting. I just think that one worldwide standard would bet better, although I believer that US-GAAP is probably better in most areas (in terms of protecting investors) than IAS...FWIW.

Regardless, all multinational companies use multiple sets of books, because tax law varies so much country by country (one set for US GAAP or IAS and one for tax accounting purposes). However, only one is reported to investors.

R
__________________
Rambler is offline   Reply With Quote
Old 07-07-2008, 08:31 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Rambler View Post
Regardless, all multinational companies use multiple sets of books, because tax law varies so much country by country (one set for US GAAP or IAS and one for tax accounting purposes). However, only one is reported to investors.

R
And if you are a regulated entity, you get to keep even more sets of books. A life insurer operating in mulitiple countries gets to keep GAAP, tax and statutory/regulatory sets of books for each entty in each country. Its the full employment for accountants model of doing business.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-07-2008, 10:10 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,290
Heck... I tried to post to this last week and it did not take....

Remember that the SEC can change back anytime it wants... but that would be impractical...

They also change the international rules for a number of items the US thought were not sufficient....

And FINALLY... if the investors decide not to invest in a company that does not give full disclosure... they will have to produce the old way also... remember Enron... they did not give full disclosure and people got burned.... then again... people seem to invest in almost anything... so maybe this is my bad thinking...
__________________

__________________
Texas Proud is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Government accounting vs. Big 4 idoru Young Dreamers 29 10-28-2008 06:15 PM
Accounting Question, Please MJ FIRE and Money 3 10-03-2007 02:05 PM
Stock Market Decline-Tests your beliefs - Have a plan and work the plan dex FIRE and Money 21 08-18-2007 02:24 PM
Talk about sloppy accounting practices... REWahoo Other topics 13 02-15-2007 01:22 PM
Need accounting help greenhm FIRE and Money 21 08-05-2005 08:53 AM

 

 
All times are GMT -6. The time now is 07:38 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.