"Regras de contabilidade dos EUA ficarão melhores"

As regras do FASB são complicadas e representam mais de 25 mil páginas. Por isto a comemoração do WSJ da adoção da IFRS

Closing the GAAP
The Wall Street Journal -12/12/2007 - p. A18

Believe it or not, there's some good news to report for U.S. companies, capital markets and investors. America's bloated and confusing accounting standards are in line for some healthy competition, thanks to a series of rule changes at the Securities and Exchange Commission.

The private Financial Accounting Standards Board (FASB) has for decades enjoyed government-enforced monopoly power over America's accounting rules, and not even FASB is impressed with the results. The board's Chairman, Robert Herz, says the rules, known as Generally Accepted Accounting Principles (GAAP), are "too detailed," with "too many exceptions" and just plain "not good" for specific industries like insurance. Just how complicated are America's accounting rules? Mr. Herz says they run "up to 25,000 pages, we think."

A set of rules so dense that no one is sure how many there are must set some kind of regulatory record. Still, Mr. Herz has been on the job for more than five years, so he's an unlikely candidate to perform an extreme makeover, bureaucracy edition. Why is he trashing his organization's principal product?

It's the only tenable position, as virtually the entire financial world outside the United States rejects cumbersome, complex GAAP in favor of -- and we promise this is the last acronym -- IFRS, International Financial Reporting Standards. More than 100 countries now accept or require these more rational standards. In the U.S., companies have had no choice but to report their financials in GAAP, no matter how confusing to investors -- until now.

On November 15, the SEC voted unanimously to stop requiring foreign companies that use IFRS to re-issue their financials in GAAP for American investors. Until Sarbanes-Oxley came along, this was the number one obstacle to foreign companies considering a listing on a U.S. stock exchange. Furthermore, the costly rule was unblemished by evidence that it provided any net benefit to investors. Institutional investors, buying record numbers of shares through Rule 144A offerings that require no conversion, have made it abundantly clear that they have no need for GAAP in valuing companies.

The next item in this investor-friendly agenda is to give U.S. companies the option of choosing to report with IFRS, instead of GAAP. The SEC has issued a proposed rule to do just that and this week will host the first of two roundtables to explore the possibilities.

Some participants will no doubt urge "convergence" of the international and U.S. accounting standards, but creating one "super-monopoly" for the entire world might compound the problems created by the FASB bureaucracy, notes an influential 2003 Harvard Law School paper by Rachel Carnachan. Ms. Carnachan urges a competition that will likely improve both sets of standards.

Knees start jerking about a possible "race to the bottom" whenever the idea of regulatory competition is raised. But IFRS's streamlined accounting standards will offer investors more protection against fraud, not less. That's because IFRS is a "principles-based" system, in contrast to GAAP's "rules-based approach." GAAP's hyper-detailed standards invite the ethically challenged to seek ways to violate the spirit of the rules by contorting to follow the letter. With IFRS's concise principles, there's far less opportunity to lawyer around them.

One lesson of Enron is that accounting complexity can help crooks conceal fraud. Reflecting that lesson, one of the more sensible provisions of Sarbanes-Oxley directed the SEC to explore the possibilities of a principles-based system. The result could be an investor-friendly initiative that will bring competition to a monopoly that sorely needs it.