The incoming chair of the Securities and Exchange Commission, Mary Schapiro, criticized the International Accounting Standards Board and expressed reluctance to move to International Financial Reporting Standards.

"When it comes to international accounting standards, it's critical that these standards are converged in a way that does not kick off a race to the bottom," she wrote in a letter to Sen. Carl Levin, D-Mich., in response to a series of questions as part of the confirmation process. "American investors deserve and expect high standards of financial reporting, transparency and disclosure - along with a standard-setter that is free from political interference and that has the resources to be a strong watchdog. At this time, it is not apparent that the IASB meets those criteria, and I am not prepared to delegate standard-setting or oversight responsibility to the IASB."

Asked to respond to the new SEC chair's comments, IASB spokesman Mark Byatt said, "We look forward to discussing convergence in accounting standards with the new administration."

Shapiro also said that small public companies should be subject to the same Sarbanes-Oxley Section 404 requirements as larger companies for auditing internal controls.

"Regarding SOX 404, accurate, robust and easy-to-understand financial reporting - and the internal controls that guarantee it - are critically important to investors and to the efficient functioning of our markets," she wrote. "Right now, we have a system where some issuers are complying with 404 and others are still exempt from it. It's time that we bring uniformity to the system so that investors know what to expect from companies, while being sensitive to the needs of small businesses."

Schapiro was also asked for her view of the relationship between the SEC and the Financial Accounting Standards Board, and whether Congress should legislate accounting rules.

She indicated that FASB should not be subjected to outside pressure. "The SEC needs to diligently oversee the FASB to ensure that accounting rules are keeping pace with innovations in the markets and the needs of investors of clear, usable financial reporting," she wrote. "I believe that FASB needs to be shielded from outside economic and political pressures, and that they and not Congress should write accounting rules."

Schapiro does not seem inclined to relax fair value accounting rules. She also pledged to work on stopping companies from abusing foreign tax havens. In addition, she disagreed with former SEC Chairman Christopher Cox, who proposed that the Public Company Accounting Oversight Board stop inspecting auditing firms in other countries and instead delegate its inspection authority to foreign oversight bodies. Schapiro indicated that she does not believe the Sarbanes-Oxley Act allows the SEC to delegate this authority.

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