DEVELOPING INTERNATIONAL ACCOUNTING STANDARDS—THE SEC'S 20-YEAR JOURNEY (JUNE 1995‒DECEMBER 2015): PART 1 (JUNE 1995‒AUGUST 2006)

Abstract

Cross-border investment opportunities soared in the late 1980s and 1990s, resulting in a call to harmonize accounting standards. For the past twenty years, the U.S. Securities and Exchange Commission (SEC or Commission) has invested significant resources in support of achieving a high quality set of global accounting standards that could be used in cross-border transactions.
In March 1996, more than 750 foreign issuers, representing over 45 countries, were registered with the SEC (Sutton, 1996). The U.S. Congress also was interested and engaged in the international accounting standards debate. In 1996, the Congress directed the SEC to respond to the expanding global securities markets by supporting the development of a high quality set of global accounting standards as soon as realistically possible.
The purpose of this study is to evaluate the SEC, and specifically, the Office of the Chief Accountant and its Chief Accountants because accounting standards generally are established and enforced by the SEC's Chief Accountant, and these individuals' actions and relationships primarily with three external standard-setting bodies (FASB, IASC, and IASB)—across two decades (June 1995‒December 2015)—for the purpose of assessing the Commission's actions and furtherance of a high quality set of global accounting standards that can be used for cross-border transactions in the United States and across other global markets.
This study is presented as a two-part series. Part 1 covers the period of June 1995 to August 17, 2006, while Part 2 covers the period August 18, 2006 through December 2015.

We are facing a future in which capital flows across borders can be expected to continue to grow, and the need for a common, high quality financial reporting and disclosure framework to facilitate cross-border financings will become more intense.
                                                                                                                                                                                Michael H. Sutton
                                                                                                                                                                          SEC Chief Accountant
                                                                                                                                                                  (June 1995 ‒ January 1998)