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An analysis of SEC comment letters and IFRS

Cheryl L. Linthicum (College of Business, The University of Texas at San Antonio, San Antonio, Texas, USA)
Andrew J. McLelland (Raymond J. Harbert College of Business, School of Accountancy, Auburn University, Auburn, Alabama, USA)
Michael A. Schuldt (Franklin P. Perdue School of Business, Department of Accounting and Legal Studies, Salisbury University, Salisbury, Maryland, USA)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Article publication date: 3 July 2017




This study investigates the influence of the Securities and Exchange Commission (SEC) on the interpretation and application of International Financial Reporting Standards (IFRS) by examining a group of SEC-selected foreign private issuers filing 2005 annual reports in the USA and reporting using IFRS for the first time.


This paper uses hand-collected information from SEC comment letters to analyze IFRS topics and documents the ultimate resolution of each SEC comment (no change to filing, current change to filing or prospective change to future filing). The authors use descriptive statistical analyses, as well as a logistic regression model involving the resolution of each SEC comment, to examine the SEC’s influence on the interpretation of IFRS.


The study finds both higher comment totals, and higher numbers of required filing modifications, for those IFRS pronouncements which were identified as needing improvement during the 2006-2008 convergence efforts by the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB). Additionally, the study documents a decreasing likelihood of a filing modification when US generally accepted accounting principles (US GAAP) guidance is referenced in comment letter correspondence involving IFRS topics.


The study extends the IFRS literature and the SEC comment letter literature by focusing on the resolution of comments directed at IFRS disclosures, as well as exploring the factors which influence whether a comment ultimately requires a filing modification.



Linthicum, C.L., McLelland, A.J. and Schuldt, M.A. (2017), "An analysis of SEC comment letters and IFRS", Journal of Financial Reporting and Accounting, Vol. 15 No. 2, pp. 226-244.



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