Doubts appear to be growing, not abating, over the wisdom of adopting international financial reporting standards for domestic use by U.S. companies.

Securities analysts and investors—the very people IFRS is intended to help—are increasingly getting cold feet the closer the end-2011 date approaches for the Securities and Exchange Commission to make a decision on whether and when the United States should adopt IFRS, Accounting Policy and Practice Report has found.

The SEC in May produced one possible model for IFRS incorporation in which the SEC would endorse what it could of IFRS, then try to converge remaining areas of difference, while allowing the possibility of exceptions for any unique aspects of U.S. laws or markets. But as comments came into the SEC on this particular model, a more general unease with IFRS also tended to emerge.

“Until such time as the SEC has completed the full analysis of the work plan, our view is that it is premature for the SEC to consider a method to incorporate IFRS,” Kurt Schacht, managing director of CFA Institute's Standards and Financial Markets Integrity Division, and Gerald White, chairman of the group's Corporate Disclosure Policy Council, wrote in comments typical of a more restive mood to what could be an impending SEC decision. “The SEC should take the time necessary to thoroughly complete the work plan and not be beholden to a 2011 decision date with respect to the U.S. incorporation of IFRS,” they also said.

Other commenters pointed to a less-than-complete review of the underlying quality of IFRS standards, insufficient research on the implementation practicality in the United States, continued concerns over the cost of implementation, and the reluctance of the International Accounting Standards Board’s interpretive arm to issue implementation guidance.

The SEC has said little publicly about its deliberations over the feasibility and utility of IFRS, or whether its end-2011 target date for a decision is still likely. SEC Chief Accountant Jim Kroeker told a Sept. 12 AICPA banking conference said that one key area of the standards—financial instruments—needs more cooperative and a “strengthening” of work among U.S. and international standards setters. Kroeker said the SEC is working “aggressively” toward making a decision on IFRS by the end of 2011, but stopped well short of making any promises to meet that goal.

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--Steven Marcy