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AICPA recognizes IFRS, IASB as standard-setter

AMELIA ISLAND, Fla., May 19, 2008 -- The governing Council of the American Institute of Certified Public Accountants voted to designate the International Accounting Standards Board in London as an accounting body for purposes of establishing international financial accounting and reporting principles.

The amendment to Appendix A of AICPA Rules 202 and 203 gives AICPA members the option to use international financial reporting standards (IFRS) as an alternative to U.S. generally accepted accounting principles.

“The AICPA recognizes that international accounting standards are gaining wider use and acceptance in global capital markets and in the United States,” said Barry C. Melancon, president and CEO of the AICPA. “This small but important rule change will enable CPAs to better perform their professional obligations to clients, financial reporting constituents and the public.”

Appendix A to Rules 202 and 203 of the AICPA’s Code of Ethics sets forth the standard-setters that have been designated by Council. Under Rule 202, a member who performs professional services shall comply with the standards promulgated by the designated bodies. Additionally, a member may not say that financial statements are in accordance with generally accepted accounting principles unless they follow the standards promulgated by a standard setter listed in Appendix A of Rule 203.

The Securities and Exchange Commission decided last year to allow foreign companies to report using IFRS without reconciling to U.S. GAAP.

Other bodies designated by Council to promulgate accounting standards are the Financial Accounting Standards Board, the Governmental Standards Accounting Board and the Federal Accounting Standards Advisory Board. Council’s action now adds the IASB to the list of designated accounting bodies.

The FASB will continue to set standards in the U.S.

The AICPA’s Board of Directors proposed the rule change to Council after hearing recommendations of a task force at the Board’s April 2008 meeting. The task force recognized that the accelerating pace of international acceptance of IFRS is leading toward future establishment of a single set of global accounting standards for public companies. The Board agreed that Council should re-assess in three to five years whether the designation of IASB remains appropriate.

With Council’s vote to designate IASB, the AICPA’s Auditing Standards Board (ASB) and the Accounting and Review Services Committee (ARSC) will now prepare clarifying language on how audit, review and compilation reports can be modified when reporting on financial statements prepared in accordance with IFRS.