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rJOSC0'1, the U.S. is one of the few countries that requires

reconciliation of foreign country financial statements to local U.S.

accounting and auditing standards. 9/ As has often been noted, this

requirement has dissuaded many high quality foreign companies from

entering the U.S. equity markets. 10/ Harmonized accounting standards

could help eliminate this barrier, thereby providing U.S. investors with

greater and more efficient access to foreign securities, enhancing the

international competitiveness of the U.S.financial markets, and enabling

securities services businesses in the United States to compete more

successfully with their foreign counterparts.

A further benefit of increased harmonization of accounting

standards is that it should tend to simplify accounting in U.S.

multinational corporations, which are now required to deal with a variety

of differing accounting standards in the countries in which their

9/ (1989). IOSCO, International Equity Offers: Summary of Report 12

10/

.s.H,~,

Securities Act Release No. 6866, 55 FR 23751,23751-

52 (June 12, 1990) eOne of the most significant barriers to inclusion of U.S. security holders in an offshore exchange offer has been the need for adherence to, or reconciliation with, U.S. generally accepted accounting principles ("GAAP'1 and auditing standards, as well as concern over continuing reporting requirements under the Exchange Act.'1; Securities Act Release No. 6841, 54 FR 32226, 32226 (August

4, 1989) ("Foreign issuers that consider direct access to the U.S. capital markets through registered public offerings frequently are dissuaded by the substantial differences in disclosure standards, particularly with respect to accounting standards.").

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