DEVELOPING INTERNATIONAL ACCOUNTING STANDARDS—THE SEC'S 20-YEAR JOURNEY (JUNE 1995‒DECEMBER 2015): PART 2 (AUGUST 2006‒DECEMBER 2015)

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 was presented as a two-part series. Part 1 covered the period of June 1995 to August 17, 2006, while Part 2 covers the period August 18, 2006 through December 2015.

The SEC has a unique position out on the front line by virtue of its legislative authority, regulatory review and enforcement activities. Through its oversight role, the SEC has the ability to interact with the various standard setters, which may be especially important if they start heading in divergent directions. This coordination is particularly important as we work towards global convergence of accounting standards (Herdman, 2001).
                                                                                                                                                                                  Robert K. Herdman
                                                                                                                                                                               SEC Chief Accountant
                                                                                                                                                               October 2001‒November 2002