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Compliance: New (and Tougher) Direction at the SEC
Mary Shapiro has been selected to lead the SEC in the Obama administration. Expect Shapiro’s approach to be a dramatic departure from Christopher Cox’s tenure in the Bush administration.
Shapiro has made clear that she intends to deviate from the current path on the roadmap towards IFRS (International Financial Reporting Standards). The IFRS is a streamlined set of global accounting rules, that may not seem thin at 2500 pages, but is only one-tenth the volume of the 250,000 pages of the existing GAAP regulations. In a period of financial crisis the idea of moving from stringent regulations to a more relaxed set of rules seems misguided.
The SEC had been considering fast-tracking adoption of IFRS, but under Shapiro the period during which the switch is considered and the change is open to public comment has been extended. Shapiro is also bringing on board to the SEC two out-spoken critics of former SEC actions: Charles Niemeier and Kayla Gillan.
Gillan had complained that under Cox the SEC was trying to water down the audit standards mandated by legislation like Sarbanes-Oxley. Likewise, Niemeier has criticised the SEC for rushing too quickly to the IFRS without considering ramifications.
