Fed up with what they regard as U.S. fascination over international accounting rules, a duo of accounting professors have written their epilogue on the story of U.S. adoption of International Financial Reporting Standards. “The quixotic quest to create uniform international standards is dead and done,” they assert.

Paul Bahnson, a professor at Boise State University, and Paul B.W. Miller, a professor at the University of Colorado, have spent the majority of their careers in academia, but also put in some professional time in the regulatory ranks at the Financial Accounting Standards Board and the Securities and Exchange Commission. They offer a harsh interpretation of the revelation by SEC Chief Accountant Jim Kroeker in December that the SEC would not make a decision by the end of 2011 as long anticipated on when, whether or how the United States would follow IFRS. Instead, Kroeker said, the staff needed “a measure of a few additional months” to finalize its recommendation to the commission, and then the commission would need some additional time to reach a decision.

Miller and Bahnson believe Kroeker was signaling more than just a delay in a decision. According to a recent article they penned in an accounting professional journal, Miller and Bahnson believe the SEC has already determined it can't or won't adopt IFRS in the United States, and now is focused figuring out its plan for damage control. Adopting IFRS would compromise U.S. sovereignty and conflict with federal statutes, they say, and incorporating IFRS principles into U.S. rules piecemeal will disappoint key players who have pushed for adoption. “They have to invest some time figuring out how to explain what they've decided in order to minimize negative reactions,” they wrote.

FASB has been working for years with the International Accounting Standards Board to eliminate big differences between GAAP and IFRS to help create a pathway for the United States to eventually adopt IFRS. Bowing to pressure from the European Union, the SEC already determined in 2007 that IFRS was adequately comparable to GAAP to allow overseas companies listed on U.S. exchanges to file their financial statements in IFRS, as long as they followed the full book of rules as written by the IASB without national carve-outs. In the past year, SEC staff members have focused more on how the United States might continue on a convergence track, adopting IFRS piecemeal over time.

Bahnson and Miller assert that the SEC has already determined – through its work plan, studies, and feedback to discussion documents – that adopting IFRS is legally impossible, that a prolonged plan of endorsement is unrealistic, and that allowing U.S. companies to choose between GAAP and IFRS would be unworkable. “In addition, we suspect they realized changing would create large costs with little or no benefits,” they wrote.