20080707 bush corporate responsibility 18
President Bush speaks to business leaders at an Association for a Better New York luncheon on Wall Street in July 2002. Bush encouraged corporate responsibility after numerous American corporations had come under scrutiny of the Securities and Exchange Commission. - 


KAI RYSSDAL: Congress went back to work today. For just a couple of weeks before its August recess and the election. The Bush administration was hard at it over the long, holiday weekend. Late Friday the Securities and Exchange Commission let slip that it's considering some changes to accounting rules that American companies have to live by. Big changes, too. Like, letting them use foreign accounting standards that sometimes are looser than U.S. regulations. From Washington, Marketplace's John Dimsdale reports.

JOHN DIMSDALE: Former SEC Commissioner Joseph Grundfest says accounting rules are full of complexity and nuance.

JOSEPH GRUNDFEST: U.S. rules are better in some ways, foreign rules are better in other ways. It's hard to reach the conclusion that one is clearly dominant in all regimes.

But international rules require fewer disclosures about mortgage-backed securities and derivatives, the very investments that triggered the current credit crisis. Southern Methodist University law professor Mark Steinberg is one of many who worry that adopting international standards would roll back reforms passed after the Enron and Worldcom scandals.

MARK STEINBERG: The concern is five years after Sarbanes-Oxley, here we are introducing more lax rules, not only internationally but domestically as well.

With the SEC considering allowing U.S. companies to use foreign accounting rules, some people see an industry trying to take last-minute advantage of a business-friendly administration.

Lynn Turner, a former chief accountant at the SEC, says the Big Four accounting firms are lobbying hard for the changes.

Lynn Turner: They know they've got a very friendly ear in Chris Cox, the current SEC chairman on this issue. So they're pushing to have this adopted before he leaves town with the change in administration.

But Joseph Grundfest, now a corporate governance professor at Stanford, says even if the SEC adopts international standards, later commissions can easily go back to the old rules. The SEC has asked for public comment, but has yet to issue proposed new rules on international standards.

In Washington, I'm John Dimsdale for Marketplace.