The future shape of harmonization: the EU versus the IASC versus the SEC

Abstract

The paper analyses the implications of the EUs proposal to permit large multi-national corporations (global players) to present their consolidated accounts in accordance with the IASs of the IASC. After an analysis of the problems faced by both the EU and the global players, it considers the chances of the EU and the IASC reaching agreement. A major problem is identified as being that the IASC is dominated by the Anglo-American approach to financial reporting which is fundamentally different from the Continental European approach followed in the EUs directives. It is felt that a compromise might be achieved if both the EU and the IASC agreed to restrict the application of IASs to the consolidated accounts of the global players. Finally the position of the American SEC is considered in the light of the IASC-IOSCO agreement. The paper concludes that it is improbable that the SEC will accept the IASs for listing purposes on Wall Street.