The SEC is seeking to put in place a specific timetable which will allow US companies to adopt global accounting standards. The move is being considered crucial to stay competitive in the international markets but critics claim that it will amount to outsourcing authority to foreign regulators.

On Wednesday, the Securities & Exchange Commission announced that it is preparing a “road map” which will bring in international accounting standards by the year 2014. However the changes may be embraced sooner by the largest twenty companies in each industry according to market capitalization.

The move was welcomed in some quarters like the American Institute of Certified Public Accountants which felt that freedom from US accounting rules would allow companies to compete globally. On the other hand, since the changes would permit greater flexibility to companies in the matter of reporting income and assets, critics argue that they would not be in the best interests of the investors as accountants would be able to manipulate the true picture of profits.

The SEC has decided to meet in another two months’ time and after taking in feedback from public comments, will have another vote.

The need for international accounting standards has become pressing in an increasingly global economy. While thousands of European companies prepare to adopt standard accounting norms in 2005, nations like China and Canada are also exploring the possibility of merging with it their own financial accounting rules.