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increase in the usefulness of financial statements that harmonization

could provide to U.S. investors in foreign securities.

The U.S. rules prohibiting foreign companies from offering securities in the U.S. or listing on U.S. exchanges without compliance

with U.S.accounting requirements have not deterred U.S.investors from

purchasing

the

securities

of

foreign

issuers.

8/

U.S.

investors

must

make these purchases on the basis of financial statements that are

prepared in accordance with a variety of accounting standards of a

variety of countries. Thus, these financial statements are unlikely to be

comparable. However,financial statements prepared in accordance with

harmonized accounting standards would be far more comparable than

those currently relied on by U.S. investors. They would enable, for

example, an investor to compare General Motors with Daimler Benz,

Toyota and Volkswagen.

Another benefit of harmonization is that it could increase

dramatically the willingness of foreign issuers to participate in the U.S.

securities markets. As was noted in a report on international equity

offerings of the International Organisation of Securities Commissions

8/

The securities of over 1000 foreign issuers currently trade in the

non-NASDAQover-the-counter market pursuant to the exemption from

registration with the Commission provided by Exchange Act Rule 12g3-2{b). 55 SEC Annual Report 132 (1990). The exemption is conditioned on such companies furnishing their home country disclosure documents to the Commission.

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