The SEC accepts IFRS financial statements from non-U.S. companies, while requiring U.S. GAAP from U.S. companies. Comment

Question:

The SEC accepts IFRS financial statements from non-U.S. companies, while requiring U.S. GAAP from U.S. companies. Comment on the difficulties faced by financial analysts who analyze financial statements to assess the financial condition and performance of companies. Consider, for example, the plight of an analyst in the pharmaceutical industry who must assess and compare the financial performance of giants Novartis (a Swiss firm using IFRS) and Johnson & Johnson (a U.S. firm using U.S. GAAP).

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...

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