and the Commission plays a role in the governance of the international
standard setter as a member of the Monitoring Board.
Under the framework, these
interactions would remain similar to current practice. Additionally, the Staff would build
upon the relationships currently held with the IASB and its staff to enhance the processes
employed in the oversight of international standards development. Further, the Staff,
particularly in the Office of the Chief Accountant, would expand its relationships with
other securities regulators with respect to interpretations of accounting matters in order to
inform the Staff on the application of IFRS across different jurisdictions.
As is the case today, the Commission would retain the ultimate authority to establish
financial reporting requirements in those instances in which interpretative guidance is
required or appropriate for U.S. constituents, although addressing such needs through
standard setting would still be the preferred approach. The Staff also could issue
guidance following similar processes to those employed currently and using, for instance,
a format similar to a Staff Accounting Bulletin. Under the framework, the issuance of
Staff guidance should be an infrequent occurrence, and, in all instances, the Staff would
make efforts to develop any incremental requirements such that they would not conflict
On an ongoing basis, the Staff would need to monitor international standard-setting
developments to understand any implications of changes to IFRS on the Commission's
existing rules, regulations, interpretations, and forms. Incorporation of IFRS and any
modifications to IFRS thereafter could necessitate additions to or deletions or
modifications of existing SEC guidance. For example, IFRS currently does not have
requirements for oil and gas companies similar to those of the Commission.
the Commission could conclude that these requirements remain relevant and important
for U.S. investors and retain such requirements upon any incorporation of IFRS into the
The Staff participates in the development of IFRS primarily through the work of IOSCO. Through
membership in IOSCO's Standing Committee on Multinational Disclosure and Accounting, the Staff
assists in writing IOSCO comment letters on exposure drafts of standards published by the IASB and
serves as one of the IOSCO representatives on several of the IASB project working groups. As one of two
IOSCO representatives, the Staff serves as a non-voting Observer to the IFRS Interpretations Committee.
The primary purpose of the Monitoring Board is to serve as a mechanism for formal interaction between
capital markets authorities and the IFRS Foundation, thereby facilitating the ability of capital market
authorities that allow or require the use of IFRS in their jurisdictions to effectively discharge their mandates
relating to investor protection, market integrity, and capital formation. The Monitoring Board helps ensure
the public accountability of the IFRS Foundation by monitoring and reinforcing the public interest
oversight function of the IFRS Foundation, as well as by promoting the continued development of IFRS as
a high-quality set of global accounting standards. Among other responsibilities, the Monitoring Board
participates in the IFRS Foundation Trustee nominations process and approves Trustee nominees. The
Monitoring Board also reviews the Trustee's oversight of the IASB's standard-setting process, confers with
the Trustees regarding their responsibilities, and refers matters of broad public interest related to financial
reporting for consideration by the IASB. The members of the Monitoring Board currently are the
Emerging Markets and Technical Committees of the International Organization of Securities Commissions
("IOSCO"), the EC, the Financial Services Agency of Japan, and the SEC. The Basel Committee on
Banking Supervision participates in the Monitoring Board as an observer.
In certain instances, the Staff currently discusses the application of IFRS by particular foreign private
issuers with the issuer's home country's regulator.
See SEC Release No. 33-8995 (Dec. 31, 2008), Modernization of Oil and Gas Reporting.