A group of academics offer some new food for thought in the ongoing debate of when and how to transition the United States to international accounting standards. The professors say the upfront cost of transition won’t necessarily be recouped in lower cost of capital or improved capital allocation because the United States has plenty of other factors at play that already produce high-quality reporting.

“We’re not disputing the fact that high-quality, comparable financial reporting practices can have capital market benefits,” said co-author Peter Wysocki, a professor at the Massachusetts Institute of Technology who is transitioning to the University of Miami. “The net effect for a given company in the United States is less obvious.”

The authors, including professors at the University of Pennsylvania and the University of Chicago, say a move to a new set of accounting standards would reduce companies’ cost of capital only if it led to an improvement in the quality of reporting.

The United States already meets a high level of reporting quality relative to other countries as a result of various “institutional features,” said Wysocki. Those include things like an active investor and analyst community, a rigorous audit process, and oversight by the Securities and Exchange Commission, among others, he said.

“It’s a little difficult to argue a move to IFRS will result in significant improvement in reporting quality,” Wysocki said. “We’re already at a high level because we already have those institutional features in place.

Measuring the overall impact of adopting IFRS in the United States comes down to a trade-off between the transitioning costs and the “relatively modest but recurring benefits” of cross-border comparability and enabling companies on multiple platforms to report under only one, the authors said. They suggested instead of mandating IFRS for U.S. companies, as the SEC is considering, the United States instead should follow a staged approach where companies have some options around adopting IFRS.