Question: what system does the sec require companies to use when preparing financial statements

title: International Financial Reporting Standards
text: International Financial Reporting Standards , usually called IFRS , are standards issued by the IFRS Foundation and the International Accounting Standards Board ( IASB ) to provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries . They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries . They are progressively replacing the many different national accounting standards . They are the rules to be followed by accountants to maintain books of accounts which are comparable , understandable , reliable and relevant as per the users internal or external . IFRS , with the exception of IAS 29 Financial Reporting in Hyperinflationary Economies and IFRIC 7 Applying the Restatement Approach under IAS 29 , are authorized in terms of the historical cost paradigm . IAS 29 and IFRIC 7 are authorized in terms of the units of constant purchasing power paradigm .