A fight among accountants may not be as dramatic as a

World Wrestling Federation

bout, but a veritable death cage match is underway between two key bean-counting organizations.

The

International Accounting Standards Committee

, or IASC, a group of accountants from 104 countries, is rumbling with the

Financial Accounting Standards Board

, a.k.a the FASB, the U.S. accounting group which sets U.S. rules, over the accounting information foreign companies (and, potentially, domestic ones) use to list on U.S. exchanges. While the issue riling mild-mannered eye shades may sound arcane, it's of enormous importance to investors. At stake is a potential explosion of new listings on U.S. exchanges by foreign companies, as well as the quality of the public information about those companies.

A little background: For the past several years, the IASC has worked to develop a global set of accounting rules that would standardize the financial information released by companies. Surprisingly, what constitutes a profit in, say, Germany, is not necessarily the same as in the U.S. right now. Obviously, that kind of information is fundamental to making investment choices.

The need to develop global rules has been clear for some time. Markets have become increasingly globalized over the past 20 years, with more companies wanting to list in the U.S. to access capital markets here, and more U.S. investors wanting to invest overseas in the hope of reaping potentially huge returns. The weakness of accounting standards in many countries became clear during the financial crisis of 1997 and 1998, when many investors were surprised to find that companies they thought were sound, were in fact not. In most cases, those companies were adhering to local regulations.

To nonaccountants (like myself), standardizing these rules may sound easy, but doing so has proved to be an enormously complex task. Nonetheless, the IASC released a set of standards last year and the

International Organization of Securities Commissions

, an international group of securities regulators, is expected to recommend their adoption some time this year.

However, the FASB slammed the international rules. It issued a report listing 250 specific areas in which they were weaker than those used in the U.S. In the world of accounting, that's a body slam that would make

Hulk Hogan

proud. A fundamental criticism is that the IASC rules are principles rather than line-by-line regulations like those of the

Generally Accepted Accounting Principles

, or GAAP. That means they are more open to interpretation and increases the importance of independent auditors, a rarity in many countries. Proponents of the international rules counter that some of the IASC rules, even if they are principles, are stronger and more up to date.

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U.S. financial markets have long prided themselves on their accounting rules, which are viewed as the strictest in the world. Foreign companies that list in the U.S. are required to use GAAP, or reconcile the differences between their local rules and GAAP, which, of course, is basically the same as requiring them to use GAAP. While a few

Securities and Exchange Commission

requirements for foreign companies are easier than for their domestic counterparts -- foreign companies are not required to file electronically, for example, and they don't have to publish annual reports for six months after the end of the fiscal year, compared with 90 days for domestic companies -- foreign companies have long complained about the burden of meeting U.S. rules.

In mid-February, the SEC sought public comment on the IASC rules. While the comment period does not equate with a rule change -- and it's far from clear that the SEC is leaning toward adopting the international rules -- this is the first step toward doing so.

While there is disagreement among accountants over which rules are better, there is consensus on the result. Should the U.S. adopt the international rules, a wave of foreign companies will list in this country, although no one is willing to make a guess at an exact number. Some companies, including German car manufacturer

BMW

, have said they will consider listing in the U.S. if the international rules are adopted.

David Hawkins, a professor of accounting at

Harvard Business School

and an accounting consultant for

Merrill Lynch

, believes that the SEC should adopt the international rules and that other forces will make up for the looser standards. "The market imposes a certain amount of discipline," he says. "We've seen what happens when U.S. companies stretch the GAAP. The market penalizes them." He thinks the same thing will happen if the ISAC rules are adopted -- the SEC will monitor their compliance and the threat of lawsuits in the litigious U.S. system will serve as a deterrent.

Even though the IASC rules are looser, investors will probably be better off if the SEC adopts them. They'll be able to access more foreign companies on the

Nasdaq

and the

NYSE

with better information than they could hope to get if they invested in the companies' home markets. In this match, investors could be the ones who walk away with a WWF belt.

David Kurapka's Global Portfolio column, formerly known as Trade Winds, appears Wednesdays and Fridays on TSC. In keeping with TSC's editorial policy, he does not own shares in any companies or mutual funds mentioned in this column. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

dkurapka@thestreet.com.