|
Foreign companies want to sell food to the United States, but they
don't want to follow our rules or be burdened by our inspections.
Foreign steelmakers want to sell steel to the United States, but the steel is often weak or rusts prematurely.
Now foreign companies want to be listed on U.S. stock exchanges, to access our vibrant capital markets, but do not want to follow our accounting rules. Some, including me, would call this hubris. Why is change this even being discussed?
(Read more)
The Securities and Exchange Commission is considering a proposed
rule to allow foreign companies to use international accounting
standards in filings with U.S. regulators. Currently, companies whose
securities are registered in the U.S. must - gasp! - follow American
rules known as generally accepted accounting principles (GAAP).
Cooking
the books is a bad thing. G.E. could tell you all kinds of false and
wonderful things about their businesses, and past and future
profitiability, to inflate the company's stock price. But that would
be fraudulent and illegal.
The Securities Act of 1933 and the
Securities Exchange Act of 1934 laid the groundwork forcing companies
to be standardized and truthful in securities markets. The Acts
remedied massive problems prior. We have Enron events every so often,
and the SEC often reacts.
If you want to drive a car in the U.S.,
you follow our speed limit, not an international speed limit. If you
want to list your stock on the NYSE, you follow our rules.
Trackback(0)
 |
TrackBack URI for this entry
Subscribe to this comment's feed