The governing council of the American Institute of Certified Public Accountants voted to amend its rules to give AICPA members the option of using International Financial Reporting Standards as an alternative to U.S. generally accepted accounting principles.
The amendment to Appendix A of AICPA Rules 202 and 203 will let the AICPA designate the International Accounting Standards Board in London as an accounting body for purposes of establishing international financial accounting and reporting principles.
“The AICPA recognizes that international accounting standards are gaining wider use and acceptance in global capital markets and in the United States,” said AICPA president and CEO Barry C. Melancon. “This small but important rule change will enable CPAs to better perform their professional obligations to clients, financial reporting constituents and the public.”
Under Rule 202, a member who performs professional services must comply with the standards promulgated by designated bodies. In addition, a member may not say that financial statements are in accordance with GAAP unless they follow the standards promulgated by a standard setter listed in Appendix A of Rule 203.
Other bodies designated by the AICPA’s council to promulgate accounting standards are the Financial Accounting Standards Board, the Governmental Standards Accounting Board, and the Federal Accounting Standards Advisory Board. The action adds the IASB to the list of designated accounting bodies.
Of course, FASB will continue to set standards in the U.S.
AICPA 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 organization said in a statement.
The Council will re-assess in three to five years whether the designation of IASB remains appropriate.
The AICPA also said that with the council’s vote to designate IASB, the AICPA’s Auditing Standards Board and the Accounting and Review Services Committee 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.