Is the IFRS Dance Over? Maybe… but Maybe Not

My grand plan was to write about political influences on GAAP and IFRS, which I did last week; and then to move on to the FASB's mark-to-market proposals. But having received a torrent of emails – well only four – I've decided to squeeze a little more juice out of the IFRS lemon (double entendre intended).

One of my e-mailers, a proud CPA from Illinois, wrote to claim that maybe it was ICPAS, the Illinois group, that was the first to speak out against IFRS.  ICPAS "responded over a year ago that this was not the best idea at this point in time"  although the NYSSCPA comment letter was more strongly worded.  Actually, I think he was being a bit too modest: the ICPAS letter is unequivocally non-supportive of IFRS adoption.  Moreover, they say that it should not even be considered until IFRS and U.S. GAAP are fully converged.

But the most trenchant email was from a senior audit partner, who has to remain anonymous. Just for jollies, I'll call him "Debit Throat":

"Although the NY Society letter was substantial, the writing was already on the wall with [Charles] Niemeier's stand back in September, the comment letters from the ITAC (FASB Investors Technical Advisory Committee), NASBA [National Association of State Boards of Accountancy] and last week even the FASB itself." [Links in the above are to the comment letters Debit Throat cites.]

I think we are going to continue to see a lot of lobbying and whining from the Big 4 and AICPA since they had invested so heavily in this – even the IIA [Institute of Internal Auditors] and CMA [Certified Management Accountant] groups saw IFRS as a bucket of fees. …[T]he big firms and IASB was absolutely furious with state regulators about the stand they took." However, from the very beginning the arrogance of them trying to ram IFRS down the U.S.' throat was a major strategic error on their part. For one thing, they totally ignored the … enormous costs involved. As I am sure you know – academia was never invited to the party either.

…IFRS is a solution looking for a problem. There are a lot more pressing things the profession should have its eye on like M2M [mark-to-market]. IFRS is a sort of déjà vu of the XYZ/Cognitor fiasco that was another solution to a non-existent problem. "

I may be wrong, but I believe that the IFRS dance in the U.S. is over. The whole structure of a standard-setting body without any real authority or oversight in my view is a very unstable platform that requires more than support from those that stand to benefit from it the most. Conspicuously and as usual, this has not included investors." [bold italics supplied]

Whew. I wish I could be as sanguine as Debit Throat about the dance being over. I'm still holding my breath until Mary Schapiro finally names her Chief Accountant. If it is anybody else other than Niemeier, then we'll have to take a hard look at just how much slack Schapiro has been given by President Obama's advisers to follow her own mind, and to part the special interests from their "fee buckets."