Volume 3, Issue 9

September 2009

I. CAQ releases Guide to International Financial Reporting Standards

In September, the Center for Audit Quality (CAQ) released its Guide to International Financial Reporting Standards (IFRS), a timely, accessible and objective introduction to the issue of a single set of high-quality global accounting standards. In an increasingly interconnected global economy, a debate has arisen over the creation of a global language of financial reporting. The CAQ is pleased to present to investors, policymakers and other capital market stakeholders the Guide to IFRS to help inform that debate.

The CAQ developed the Guide to IFRS in recognition of the timeline in the U.S. Securities and Exchange Commission’s (SEC) roadmap of activities that need to be completed prior to U.S. adoption of IFRS. Should the SEC determine that sufficient progress has been made against these milestones by 2011, it will decide whether to require mandatory use of IFRS beginning in 2014.

In response to questions raised by capital market stakeholders about the timing and impact of U.S. adoption, the Guide to IFRS provides a balanced overview of a potential transition to a single set of high-quality global accounting standards.

“Those who access the publication will find that it presents the challenges and opportunities of IFRS, but allows readers to reach their own conclusions on this important issue,” said CAQ Executive Director Cindy Fornelli.

II. Cindy Fornelli Featured on IFRS Panel Discussions

The release of the CAQ’s Guide to IFRS coincides with a number of events at which Cindy Fornelli will address the topic of global convergence of accounting standards. Earlier this month, Fornelli spoke about the movement to a single set of high-quality global standards at the National Association of State Boards of Accountancy’s Forum of International Accountancy Regulators.

Later this month, Fornelli will participate on an IFRS panel discussion during the Council of Institutional Investors’ Fall Meeting in Los Angeles. Panelists include Lynn Turner, the former Chief Accountant of the SEC; Tom Jones, former Vice Chair of the International Accounting Standards Board (IASB); and Marc Siegel, a member of the Financial Accounting Standards Board. The panel will be moderated by Public Company Accounting Oversight Board Member Steven Harris.

In the coming months, Fornelli will participate in several other events that will further the discussion about the opportunities and challenges of U.S. convergence of accounting standards, including a gathering hosted by the Outstanding Directors Exchange, at a roundtable discussion during the AICPA/IASC Foundation Conference on IFRS in North America 2009: The U.S. Perspective; and at the NASDAQ OMX conference “The High-Performing Director: Navigating 2010.”

III. CAQ Applauds Appointment of James Kroeker as SEC Chief Accountant

The SEC recently appointed James Kroeker to the position of Chief Accountant. Kroeker had been serving as Chief Accountant in an interim capacity, during which time he led the SEC’s Congressionally-mandated study of fair value accounting standards, which was released in December 2008. The study found that fair value should not be suspended as investors believe that fair value increases transparency in financial reporting and facilitates better investment decision making.

In a statement, Cindy Fornelli said that “Jim has consistently demonstrated his commitment to investors and the capital markets through efforts to improve financial reporting and reduce the complexity of financial disclosure.

“His focus on the needs of investors is in keeping with SEC Chairman Mary Schapiro’s framework for restoring investor confidence, and is aligned with the CAQ’s mission to serve investors through improved audit quality,” Fornelli added.