There was a sting in the tail after today's announcement that Hans Hoogervorst will replace Sir David Tweedie as head of the IASB.

I'm not taking issue with the appointment. By all accounts Hoogervorst has extensive technical and political experience which will serve I'd expect as he attempts to grow the IASB.

I guess my only reservations come from an exchange with his office in the lead up to the announcement.

In June we asked his office at the Netherlands Authority for the Financial Markets, whether he was, to his knowledge, a candidate (after nominations had closed). After much to-ing and fro-ing we received an emphatic response: "The answer is no".

In the broad scheme of things this is a minor point. The work of the IASB, and Hoogervorst's efforts to grow the body, and release high quality standards - that's the real story here.

And perhaps there was some confusion or some legitimate reason for the denials. Let's hope there is more clarity from now on.

I can't help thinking that the audit inspection process here is a little second rate.

I'm certainly not questioning the experience and professionalism of the staff, or the quality of the work they do - it really just comes down to resources. The Public Company Accounting Oversight Board (PCAOB), the US equivalent of the Financial Reporting Council, has seen its enforcement and investigations budget rise from $8.5m (£5.4m) in 2008, to $12.1 (£7.8m) in 2009 and again to $15m (£9.6m).

The Financial Reporting Council's professional Oversight Board, which runs the audit inspections, had its budget drop to £1.3m in 2009 from £1.5m in 2008.

The inspection teams select 15 audits, picked according to their risk factors, from each large audit firm. After they make their recommendations in their reports they return to only about 1-2 audits, from the previous year, to make sure measures they have recommended have been implemented.

It just seems to me they are working with a vastly reduced budget not only compared to the US system, but also compared to the audit firms they are inspecting. What's more tales of audit firms changing documents before delivering them to the inspectors, gives us pause for thought about the odds our audit inspectors seem to be up against and the effectiveness of the entire system.

If the Audit Inspection Unit can complete such a high level of work with their meagre budget, imagine what they could accomplish with a budget which better reflects the importance of the work they do.

We're approaching the business end of the IASB-FASB convergence process and the standards are beginning to roll out.

By June next year both boards have to have the their significant, and most difficult standards converged if they want to claim they are substantially converged.

So the boards have been rolling out joint standards, and will jointly consider feedback. Sounds like a fairly neat solution, however cracks are beginning to emerge. Last week's lease standard caused a bit of a ruckus.

The most venom was saved for the lessor side of the accounting proposals which has been criticised as overly complex and misguided.

The IASB originally had argued to drop the lessor side completely. Even FASB originally wanted to drop the lessor side, but after mulling over the issue changed its mind believing the lessee and lessor sides of the standard should be consistent.

So the IASB went along and included lessor accounting proposals, and must now deal with barrage of criticism the proposals are likely to receive.

Criticism of the lessor accounting proposals will inevitably lead to criticism of the two boards for including the proposals, which leads to criticism of the convergence process and the IASB itself.

It highlights the challenges the IASB has ahead. Any new standards, which include unpopular concessions for FASB will ultimately attract criticism of the convergence project.

It's interesting to look at how long lease accounting has been on the agenda. Back in 2001, when the quasi-official G4 + 1 group was looking at leases a FASB member, called Robert Herz, sat down to outline some of the possible options to resolve the area.

There seems to be a whiff of reluctance in this country to put up a candidate to replace David Tweedie.

Ever since Brian Nicholson sent round a letter to audit firms and professional bodies the question has been will we or won't we. The IASB would have to be mad to consider another UK citizen, despite Tweedie's success (so far), but in the process will some high quality candidates be over looked.
The IASB of course, say no. But it seems a remote possibility to replace Tweedie, so disliked by some European quarters, with, well, another Tweedie-esque subject.

The IASB is the first to complain about political pressure, so lets hope it doesn't take political considerations into account when making this pivotal decision. The ICAEW has thrown a few names in the hat and we know there is "a list" circulating in the depths of the IASB's Cannon Street headquarters. Recruiters Spencer Stuart remain professionally tight lipped on the subject. they won't even confirm they are looking.

There's speculation the new Tweedie may come from Asia, with some suggesting it might come from Korea of Japan. Others feel it might be an Australian import (I'll declare here that I'm an Aussie myself). The country, after all, was the first to adopt IFRS, and is always among the loudest voices in accounting debates.

Some notable conspiracy theorists are even speculating the honourable Robert Herz might throw his hat in the ring (even though he doesn't step down from FASB until a year following) and this might seal the convergence deal. My conversation with him about six months back, at PwC's meet the experts event seemed to suggest it was the furthest thing from his mind - His answer was something like "I've got bigger things to worry about".

So he does, but then again, he didn't really answer the question.

Welcome to my first post. In this little patch of web real-estate you'll find a few insights I've gleaned from my own investigation and reports on accounting issues. Specifically, I'm interested in the ongoing progress (and sometimes lack of progress) towards global accounting convergence, but I also keep my ear to the ground in the audit world and try to keep on top of happenings at the Financial Reporting Council.

I regularly speak with staff at the International Accounting Standards Board (IASB) who seem to be putting in some punishing hours trying to meet a convergence deadline with US standards of June 2011.

By their own admission the boards', biggest hurdle ahead seems to be financial instruments (along with insurance). Next month the Financial Accounting Standards Board (FASB) should be putting the finishing touches on its fair value standard, which seems to take, what many perceive, as a purist accounting approach - full fair value.

It seems a long way from the IASB's mixed measurement model which allows some assets to be measured at amortised cost, and others at fair value.

In the end they may end up closer than many suspect. When the IASB put out their proposal they were sent a deluge of responses (often from financial institutions) objecting to an excessive use of fair value.

"For those instruments which are not managed on a fair value basis and have a defined maturity, the amortized cost category is the most appropriate measurement basis as it reflects the expected cash flows". Deutsche Bank said in their submission letter.

There's no reason to believe the FASB won't be hit with similar objections which might bring it closer to the IASB approach.

Short of this there is some talk of creating a common net-income figure under US GAAP and IASB rules. This works on the assumption that the net income figure is the primary performance metric used to measure performance. However the treatment of fair value gains or losses will differ in OCI and on the balance sheet.

This seems to me all a bit complex, but it does demonstrate that a bridge between the two standards might just be possible.

I'd love to hear your thoughts.