The Securities and Exchange Commission has released a draft of a five-year strategic plan that calls for a single set of high-quality global accounting standards.
While the SEC has not yet decided on the fate of the proposed roadmap for adopting International Financial Reporting Standards, SEC Commissioner Mary Schapiro and Chief Accountant James Kroeker have both said the commission will be turning its attention to the roadmap this fall.
In the meantime, the draft strategic plan listed among several regulatory reforms, raising international regulatory standards and cooperation, including working toward improvement of accounting standards in the wake of the credit crisis and the development of a single set of high-quality global accounting standards.
The SEC also said it plans to continue to promote the establishment of high-quality accounting standards by independent standard setters in order to meet the needs of investors."
In overseeing the Financial Accounting Standards Board, the SEC plans to strengthen and support FASBs independence and maintain the focus of financial reporting on the needs of investors, in accordance with recommendations from the SEC's Advisory Committee on Improvements to Financial Reporting.
The SEC said it would also support FASBs efforts to improve financial reporting, including recent standard-setting initiatives in areas such as off-balance sheet accounting and accounting for financial instruments.
In terms of international standards, the SEC also aims to take action. Due to the increasingly global nature of the capital markets, the agency will promote high-quality financial reporting worldwide through, among other things, support for a single set of high-quality global accounting standards and promotion of the ongoing convergence initiatives between the FASB and the International Accounting Standards Board, said the plan. However, the SEC stopped short of saying it would adopt IFRS.
The commission also intends to foster high-quality audits through oversight of the accounting profession via the Public Company Accounting Oversight Board. The SEC will continue to oversee the PCAOB and its regulation of the accounting profession through the PCAOBs inspection and disciplinary programs, said the SEC. The SEC also will work closely with the PCAOB on the promulgation and interpretation of auditing standards to address current issues in the capital markets.
Other goals include enhanced regulatory oversight of investment advisors to avoid problems such as the Madoff Ponzi scheme and other fallout from the financial crisis. The SEC said it would conduct a top-to-bottom review of the effectiveness of its examination process.
In addition, the SEC intends to seek legislation from Congress to establish a whistleblower program with compensation for whistleblowers who provide productive tips, as is currently the case only with whistleblowers who alert it to insider trading matters.
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