World leaders outline future of accounting

A committee of the world’s financial leaders today outlined four guiding principals that they believe should underpin the global accounting regime.

The influential Monitoring Board, which provides oversight on the framework of global accounting bodies, said standards should be “reliable”, “relevant”, “understandable” and “comparable”.

The board, which counts among its members Securities and Exchange Commission Chairman Mary Schapiro, has laid out core principles which it believes should underpin accounting standards.

In a statement, the board said accounting rules should provide investors with information to “assist them in efficiently allocating their hard-earned investment money”.

“We feel it appropriate to ensure that the fundamental principles on which accounting standards are based and under which the standard setting process operates remain front of mind as areas identified during the financial crisis as needing improvement are addressed”, it said.

The board went on to state that independence remains an essential component in the development of high quality, global accounting standards.

“The monitoring board is strongly committed to guarding the independence and accountability of the standard setting process,” the board said.

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