The Bush administration and the Securities and Exchange Commission are pressing forward with a plan that would allow American companies to opt out of using U.S. accounting standards in favor of international ones as a way to ease global business dealings and help corporations raise capital around the world.
But critics in Congress and elsewhere warn that the initiative threatens to let the industry unravel investor protections enacted since the Enron scandal.
SEC Chairman Christopher Cox said in a speech last month that the commission would soon consider issuing a timeline under which U.S. companies might be permitted to file their financial reports under international accounting rules. Now that the Senate has approved a full complement of five commissioners, such a vote could come in a few weeks, SEC spokesmen said Monday.
But Cox also has noted that such a major shift in accounting rules is not imminent. "I don't see this happening for many, many years," he said earlier this year.
Accounting experts agree that it is all but inevitable that U.S. companies will increasingly use global accounting standards, aided in large measure by the efforts of Bush officials in recent years.
"While the timing is uncertain, the handwriting appears to be on the wall that change is coming," said Arleen R. Thomas, a senior vice president of the American Institute of Certified Public Accountants.
Advocates of a single, international system of standards -- known as the International Financial Reporting Standards, or IFRS -- say that multinational corporations would operate more efficiently with one rather than two systems.
They also say that global business transactions, including attracting investors, would be simpler under a unified system.
Cox and some of his agency's senior aides, backed by Treasury Secretary Henry M. Paulson Jr. and the White House, have talked up the idea of permitting U.S. public corporations to use the standards developed by the International Accounting Standards Board rather than U.S. standards, which were established largely by the Financial Accounting Standards Board.
The White House approves of a march toward the international standard. "They're going about it the right way," White House spokesman Tony Fratto said of the SEC. "We certainly have a positive view."
