Is IFRS vs. GAAP Already Over?

America needs to stop obsessing over accounting rules minutia and learn to trust accounting professionals to follow standard accounting principles. That’s the gist of what PricewaterhouseCoopers U.S. Chairman and Senior Partner Dennis Nally said in a speech last week at the Union League Club in New York.

Instead of crying over the way that the rest of the world used to use U.S. GAAP because they wanted access to our capital markets, we should be looking at why 100 countries already allow the use of principles-based International Financial Reporting Standards (IFRS), he said.

“The fact that our present system is characterized by a set of very detailed rules—which inhibit making sensible judgments-is, in my opinion, an important reason why U.S. GAAP is not appealing outside the U.S.,” he said. “Our system has created too much confrontation and suspicion around the key relationship underlying any effective capital markets, and that is the relationship between companies and investors.”

As it turns out, “the notion that financial reporting is grounded in mathematical certainty is a common misperception,” he added.

With remarks list that, we thought you might want to read the rest of his speech, which PwC has posted on its web site (look for the IFRS comments starting about half-way through the text).