Back in the days of the Cold War, the internal workings of the Communist Party in the Soviet Union were so opaque to outsiders that a class of pundits arose to attempt to fathom what, exactly, was going on behind all those May Day parades and internal purges.

Known as Kremlinologists, these pundits were part analyst, part gossip-hound, and part tea-leaf-reader, and frankly, their guess was often not much better than that of the man in the street, because as much as you might know about who served as a Young Pioneer with whom, in the end there was just too much that no one knew.

One expects not to know much about the internal workings of a dictatorship—it's hardly surprising, for instance, that developments in North Korea are often surprising. In the face of that kind of vacuum of information, it's natural to try to fill the void—to take what you know and guess about the rest. You expect to resort to a little Kremlinology in those cases.

Where you don't expect to have to resort to Kremlinology, however, is in Washington, D.C., where transparency is supposed to be a little bit more established. And yet there's a recent issue that's so opaque, and whose inner workings are so maddeningly hidden from view, that it calls for its own version of American Kremlinology.

Before you ask, I'm not referring to any Supreme Court decisions. While they can be difficult to read in advance, and difficult to decipher afterward, the court follows a regular schedule, delivers its decisions when it says it will, and actually tells you why it decided as it did. You can disagree with, and deconstruct, their decisions as much as you like, but you can't really accuse them opacity.

No, the issue in question is the Securities and Exchange Commission's long-running dance with the question of the adoption of International Financial Reporting Standards in the U.S. financial reporting standards. The latest step in the dance was the release last Friday at 4 in the afternoon of a staff report (see our story). 

The report laid out the commission staff's opinion of IFRS (not terribly high, but not that bad, but not very good either, but you know, we're not saying it's bad) and of the pros and cons of various kinds of adoptions (more cons than pros, it seems, but you know, we're keeping all our options open). Most important, it comes hedged with warnings that the issuance of the report in no way indicates that the SEC has come to any conclusions whatsoever regarding IFRS.

Which is precisely the problem we've had for the past four or five years—the SEC refuses to come to any conclusions, or make any useful announcements.

To fill that gap, we need some new Kremlinologists. We can call them Effologists, after the commission's headquarters on F Street in Washington, D.C. They can tell us, perhaps, what it means that Chief Accountant James Kroeker is leaving this month, more or less right after the release of this non-report. They can opine on whether the Europeans help their own cause with their snarky comments, and try to gauge exactly how much SEC Chairman Mary Schapiro hates IFRS from her carefully balanced statements. Perhaps she secretly loves it, and is just lulling us into a false sense of security. Who knows? No one—that's my point.

Regardless of whether you think IFRS is Holy Writ or the Devil's accounting standards, the simple fact is that this has dragged on far too long, and it's hardly right that we should be unable to get a decision—or at least a serious timetable to a decision—from an arm of the U.S. government. The SEC frequently reminds us that this is an important issue and need serious consideration, and that's true. But the constitutionality of the biggest change to the American health care system ever was also a pretty important issue, and the Supreme Court managed to wrap that up in a couple of months.

Is there an Effologist in the audience who can remind me how many years the SEC has been weighing the pros and cons of IFRS?

Please, don't take my comparison of the SEC with the Kremlin too far. They're not a dictatorship, they're not attempting to undermine our way of life, and they are not about to launch thousands of ICBMs at us. In lots of other areas, the commission has recently been commendably active and open. But in the area of IFRS, we're left guessing like CIA analysts trying to unravel the riddle of perestroika. That kind of vacuum is a bad thing, and, it seems to me, hardly necessary.

I could be wrong though—I'm no Effologist.

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