The SEC has received from Congress the legal authority to set accounting standards in the United States. Historically, the SEC has allowed the FASB to set those standards. In addition, the SEC has refused to allow foreign companies to seek investment funds in the United States unless they agree to provide U.S. investors with financial statements prepared using FASB rules.
The number of foreign companies seeking to list their shares on U.S. stock exchanges is increasing. Even more would likely sell stock to the American public if the SEC were to agree to accept financial statements prepared according to usually less stringent IASB standards.
Why do you think the SEC has so far insisted on financial statements prepared using FASB rules? Do you agree with its policy? Explain.