On a visit to Washington D.C. by European Union Internal Markets Commissioner Charlie McCreevy, U.S. Securities and Exchange Chairman Christopher Cox and McCreevy affirmed their commitment to eliminate the need for reconciliation between international and U.S. accounting standards.

SEC chairman Cox indicated that he believes the use of International Financial Reporting Standards has the potential to produce significant benefits for U.S. investors through enhanced comparability of financial information around the world. He congratulated McCreevy on the strides made by the European Union toward implementing IFRS.

Cox also reaffirmed his commitment to the “roadmap” to eliminate the SEC requirement for foreign private issuers to reconcile IFRS-based financial statements to U.S. GAAP, by 2009 at the latest.

“The SEC is working diligently toward the goal of eliminating the existing IFRS to U.S. GAAP reconciliation requirement. Achieving that goal depends on various factors, as discussed in the April 2005 roadmap, including the effective implementation of IFRS in practice,” Cox said. “The ultimate success of IFRS for the benefit of the global capital markets depends on the contributions of many parties, including investors, regulators, auditors, issuers and standard setters.”

In mid-2006, many foreign issuers will begin to file with the SEC IFRS-based financial statements that include a reconciliation to U.S. GAAP. In the second half of 2006, the SEC staff plans to begin carrying out an analysis of these financial statements and will confer with relevant parties about its analysis.

Cox and McCreevy agreed on the need for enhancing cooperation and information-sharing among regulators, and they fully support the work plan recently announced by the SEC and the Committee of European Securities Regulators, which includes dialogue about the implementation of IFRS. Both agree that steady progress towards eliminating the need for reconciliation depends to a significant degree on the trust and communication that exist among regulators.

The regulators also noted the efforts of the IASB and the U.S. Financial Accounting Standards Board to converge IFRS and U.S. GAAP. Cox said the work on convergence of standards should proceed apace. He added that while he would not insist on a particular degree of convergence as a prerequisite for elimination of the reconciliation, he would expect to see an effective process for converging IFRS and U.S. GAAP, demonstrated by measurable progress in addressing priority issues.

They also said that mutual efforts should focus on creating the conditions that facilitate use of U.S. GAAP and IFRS in each other’s jurisdiction. Cox expects U.S. GAAP ultimately to be deemed equivalent to IFRS.

Cox and McCreevy will meet during the coming year to discuss progress on matters related to the use of high quality global accounting standards. There will also be regular meetings over the next year between SEC and European Commission officials to take stock of developments and monitor progress in moving towards mutually desired goals.