Subject: File No. S7-20-07
From: Mingwei Xue
Affiliation: Middle Tennessee State University

November 12, 2007

Since the world becomes flat, globalization is an unavoidable consideration in business. As the infrastructure of business, accounting standards perform an important factor in international markets. Therefore, increasing the comparability of financial statements worldwide is necessary for the globalization of capital markets.

Harmonization of accounting financial reporting would reduce the cost of preparing worldwide consolidated financial statements. If U.S. issuers have subsidiaries that are outside the U.S. and using IFRS to report their financial statements, thus the U.S. issuers would reduce the cost in preparing the consolidated financial statements by using IFRS instead of U.S. GAAP.

Using IFRS to report financial statements are already allowed by almost hundred countries, and it seems that more countries would allow companies prepare their financial statements using IFRS in the future. This is the trend for countries to harmonize accounting financial reporting.

It would increase the auditing expenses in short-term for the U.S. issuers to adopt the IFRS. Since the training program is necessary for the auditing professions to have the ability to audit financial statements using either U.S. GAAP or IFRS. In short-term prospect, the U.S. issuers would incur more expenses in auditing financial statements using IFRS. But I believe the saver from consolidated financial statements could exceed the additional cost of auditing expenses increased by using IFRS.