The US Securities and Exchange Commission (SEC) took a significant step in amalgamating American corporate standards with rest of the world by giving the go-ahead to a plan that could require thousands of US companies to change from the country's domestic accounting standards to global accounting rules that are quickly gaining favour abroad.

US accounting standards, known as GAAP or generally accepted accounting principles, are overseen by the Financial Accounting Standards Board, while the International Accounting Standards Board in London monitors global accounting rules called the International Financial Reporting Standards Group (IFRS).

The SEC yesterday unanimously approved a "road map" that might require large companies to adopt international standards by 2014, midsize corporations by 2015 and small businesses by 2016. Some large firms might voluntarily adopt the international rules even sooner.

SEC Chairman Christopher Cox noted at the commission's meeting that "the language of business and finance" is rapidly converging. More than 100 countries and the European Union have adopted or plan to embrace international standards, he said.

"One of the more revolutionary developments in the world's capital markets is the remarkable quickening pace of acceptance of a true lingua franca for accounting," Cox said.

There was a time when a mishmash of international accounting requirements created considerable confusion around the world. But in recent years, China, Canada, and dozens of other countries began merging their rules with standards adopted in 2005 by thousands of European companies.

International accounting standards are young and still evolving. Given US regulatory and economic clout, the pace of adoption by more countries is likely to quicken. Many in the business and financial world, including Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson, support global accounting standards.

"I'm supportive of it," Paulson said of the SEC's plans during July testimony before the House Financial Services Committee. "There are different accounting regimes with different standards and different requirements. That doesn't make them worse than ours. We've had plenty of issues with our accounting regime."

Bernanke noted that converging standards would create "more incentive for foreign companies to operate in the US." It would not, he added, "create any major problems with our accounting system."

The SEC has already taken steps towards internationalization. Last autumn, its commissioners moved to allow foreign firms to file their financial statements to the SEC using international standards rather than US accounting rules. The SEC will seek public comment on the road map, then will vote in 2011 on whether to require all US companies to change to international standards.

Under the new proposal, some of the biggest beneficiaries may be large American corporations with subsidiaries in other countries. That's because they would no longer have to keep one set of books for the US, another set for regulators in the other country.