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IMA Member Andre Van Hoek represents IMA at FASB’s Forum on High Quality Global Accounting Standards

Wednesday, January 16, 2008

On June 16, 2008, IMA member Andre VanHoek attended the FASB’s Forum on High Quality Accounting Standards as IMA’s representative. Andre is a member of IMA’s Financial Reporting Committee and has worked closely with Jeff Thomson related to issues on internal control monitoring guidance addressed by the Committee on Sponsoring Organizations (COSO).

The focus of discussion at the forum was convergence of accounting standards. It appeared at the conference that the Securities and Exchange Commission (SEC) is leaning towards giving U.S. companies the option of switching to International Financial Reporting Standards (IFRS) rather than mandating conversion as it prepares to release it road map for convergence during the latter part of 2008. Representatives from several organizations oppose giving U.S. companies an IFRS option and simply want a mandate. However, Andre VanHoek informed participants at the forum of IMA’s position, which is to favor an optional approach in the short term, followed by a mandatory requirement, so that companies are not rushed into a new accounting system. Andre informed participants at the forum that three to five years should be enough time for companies to get acquainted with IFRS. The position stated by Andre was mentioned in a comment letter that IMA’s Financial Reporting Committee issued to the SEC in November 2007 on a concept release entitled, “Allowing U.S. Issuers to Prepare Financial Statements In Accordance with International Financial Reporting Standards”.

Momentum for convergence has been building up and more movement in that direction should be expected during the summer of 2008 in addition to the SEC’s road map. Also expected soon is an updated memorandum of understanding between the FASB and the International Accounting Standards Board (IASB) in which the standard-setters will outline further steps to converge IFRS with U.S. generally accepted accounting principles.