Investors, Companies Benefit by Accounting Switch: SEC

Move to international standard will require 'massive effort,' US firms say
By Jim O'Neill,  Newser User
Posted Aug 28, 2008 9:50 AM CDT
An SEC-supported change in how businesses report earnings will make it easier to compare businesses on the international stage.   (Getty Images)
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(Newser) – The Securities and Exchange Commission sees a smoother ride for American companies, and investors, in its plan for the US to adopt international accounting standards, the Wall Street Journal reports—though the shift would be an expensive, “massive effort,” some say, requiring new training from business schools on up. Critics worry the international standards aren’t as precise and may cause confusion during the transition.

But the SEC, which wants the new standards in place by 2014, believes international rules will make it easier for investors—two-thirds of whom own shares of foreign companies—to compare international and US operations. The commission says the move will cut costs for firms currently preparing two sets of books, one for the US and one for their international bases.