Big Four firm backs G20 accounting stance

A Big Four firm has backed the G20’s call for global accounting rules, and has described convergence as a “critical step” as nations move towards adopting international accounting rules.

James Turley, Ernst & Young’s global chairman and chief executive officer said it was “imperative” that the world have one global set of accounting standards to provide investors with the best information.

“It is imperative that there is one set of financial reporting standards for the world if the quality and comparability of investor information is to be protected,” he said.

World leaders have reaffirmed their commitment to global standards at the meeting of G20 nations in Pittsburgh, providing renewed political impetus to convergence discussions between US and the international standard setter.

In a statement the leaders said they: “call on our international accounting bodies to redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011.”

“The International Accounting Standards Board’s (IASB) institutional framework should further enhance the involvement of various stakeholders.”

Turley said he was pleased to see the G20 renew its call for a single set of high quality global accounting standards and that all countries must ultimately commit to adopt international accounting rules.

“The past 18 months have shown just how globally connected the economies of the world have become. Convergence is a critical step in countries moving to a single set of financial reporting standards. However, that alone will not achieve the goal of one global financial reporting language,” he said.

“If the world doesn’t coalesce and adopt common standards, then local political and industry influence are able to play one standard setter off of the other, creating a race to the bottom,” Turley said. “That is a losing prescription for global economic growth and development, not to mention transparency to investors.”