In October, 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) signed the ground-breaking Norwalk Agreement. This agreement signified the two parties’ commitment to the ultimate convergence of United States Generally Accepted Accounting Principles and International Financial Reporting Standards. What appeared at its genesis as a good faith effort to speed convergence between the two respective frameworks seems to have misfired, with an emphasis which now appears to be moving away from convergence, and focused instead on the duality and plurality of co-existing frameworks. The SEC, a governmental entity who had previously issued a clarion call for convergence and had gone so far as to eliminate the required IFRS – GAAP reconciliations for overseas issuers in 2007, appeared in 2011 to do something of a U-turn, and even appeared to retreat from their initial convergence position by suggesting that a US issuer who is in compliance with US GAAP be allowed to state that their financial statements are also in compliance with IFRS. This paper examines the changing attitudes and increasing aversion toward IFRS integration in the US, and attempts to understand some of the reasons; specifically cultural, political, and legislative, which may help to explain this changing of attitudes and direction. There appears to be a litany of prior research relating to US GAAP and IFRS integration, but the research does not tend to focus on specific reasons why convergence has not occurred, and why attitudes toward it have changed. This paper attempts to fill a perceived gap in the research related to the examination of potential political, cultural and legislative drivers of non-convergence. The paper also briefly examines literature related to research conducted which questions whether IFRS has had a positive effect on global capital markets, and whether this positive effect may actually have been caused by the existence of other factors.
Keywords: Convergence, Harmonization, IFRS, Standard-setters, US GAAP
