[IMGCAP(1)]Is the time now right to use a financial reporting language that transcends national boundaries? This question continues to cause division in some countries, particularly in the United States.

Mary Jo White, chair of the Securities and Exchange Commission, recently put International Financial Reporting Standards back on the U.S. agenda in her remarks to the trustees of the Financial Accounting Standards Board’s oversight body, the Financial Accounting Foundation. When speaking about the 11,000 U.S. public companies and should they file with the SEC financial statements prepared in accordance with IFRS, White said, “I have made it a priority for the Commission to position itself to make a further statement on this very important subject…and I hope to be able to say more in the relatively near future’. And now we see reports that Ms. White is considering appointing a former senior partner with Deloitte to the role of chief accountant, with a brief to consider whether to allow an option for U.S. companies to use IFRS.

As I am a wholehearted supporter of IFRS as the language for use in preparing financial statements, Ms. White’s remarks and mooted actions are most welcome and very encouraging. In football parlance, we were at third and long, and Ms. White’s successful play has moved the chains, keeping the IFRS drive alive.

I am an optimist, but will my optimism be dented again? After all, although the SEC accepts that the financial statements of non-U.S. companies that use IFRS are of a quality that enables the SEC to meet its purpose—the protection of investors’ interests—some protagonists continue to push back against U.S. public companies having the option to use IFRS, let alone be required to do so. There is no level playing field.

So notwithstanding nearly seven years of experience with IFRS reporting to the SEC, some in the profession have written to Ms. White detailing their concerns, which include investor confusion and opportunities for accounting arbitrage. Sovereignty over accounting standards and the operational capability of IFRS in a litigious environment were also raised.

Today, about 45 percent of the 1,150 non-U.S. companies registered with the SEC report to the SEC using IFRS without reconciliation. Those companies represent trillions of dollars in market capitalization and include the Australian behemoths BHP, Rio Tinto and Westpac, the world’s 13thlargest bank. The two-GAAP environment does not appear to have affected investor confidence in these companies.

In 2008, my organization, CPA Australia, wrote to the SEC to congratulate it on its roadmap for the adoption of IFRS by U.S. public companies from 2014. Both then and now, our position is that financial statements are about communication, and IFRS is the financial reporting language best able to facilitate consistent communication to the broadest possible audience. Moreover, IFRS ensures consistency in the source for accounting guidance used in the preparation of financial statements, whatever the place of incorporation of the company. And on issues of sovereignty, numerous countries, including my own, have found ways to effectively deal with it.

Progress has been slow. With the immediate challenges of the global financial crisis substantially addressed, now is the right time for the SEC to demonstrate its leadership on this important subject. Ms. White is doing just that.

I have a profound belief in common sense. On that basis I am optimistic that by 2020 at the latest, U.S. public companies will report using IFRS. And with that will be credence to the claim that IFRS is the undisputed universal financial reporting language. Therefore, a two-GAAP environment should only ever be considered by the SEC as an interim solution. Realistically, there are not enough people bilingual in IRFS and U.S. GAAP for the two to co-exist in the longer term, and unfortunately it may serve to encourage the advancement of more financial reporting languages (a EU dialect of IFRS, for example).

More complexity is the last thing the profession needs, and it is certainly not in the interests of the millions of American shareholders.

Alex Malley is chief executive of CPA Australia, one of the world's largest member organizations for business, finance and accounting professionals, representing more than 150,000 members working in 121 countries.