What will happen with regard to the global convergence of accounting standards?
Herz: There’s a lot to say about global convergence, probably more than your readers would like all at once! Some believe that convergence of U.S. GAAP with international standards is not possible because U.S. GAAP is complex and rule-oriented, while international standards tend to be principle-based. On the other hand, our effort to expose for comment a proposal for principle-based standards in the U.S. indicates the board’s belief that we can come together. Whether there will ever be a single worldwide GAAP can be questioned, but I believe it would be possible to create a set of common principles that each national standards-setter could agree to and then interpret or clarify for the issues in its own country. There are other cultural, legislative, and regulatory hurdles, too. For example, accountants in few countries face the same litigation risks as accountants in the U.S. Nor do all countries have regulators as powerful as the SEC or legal remedies for perceived accounting princip
