A dramatic shift of power lies ahead for the international accounting
standard setter, which will in future be overseen by a monitoring group.
The group will act as a link between the
Standards Committee’s trustees and public authorities, and will have the
authority to not only approve trustees who govern the International Accounting
Standards Board but may hold meetings with the chairman of the trustees or the
IASB chairman, about any area of work.
Those appointed to the group would strive to convey the message that the
standard setter is transparent and accountable to public authorities.
For many the announcement is overdue, since the IASB’s process of standard
setting has earned it the wrath of both civil campaigners and parliamentarians
at the EU.
Gerrit Zalm, chairman of the IASCF, has acknowledged that it is a priority.
And just last week, SEC chairman Christopher Cox stressed the need for a ‘public
policy oversight body’ to watch over the IASB.
But for some, the thought of a group with the authority to raise questions
about the IASB’s work, or the decisions of the trustees, may seem too close for
Senior industry figures suggested the group could have far too much influence
on the actual agenda of the board, and fear interference of a political nature
since the group is regionally represented. A source familiar with the IASB said:
‘There is concern about the monitoring group, politics and regionalisation, with
the danger that there is a chance for politicians to interfere as they take
regions into account… [the proposals make the process more political and
therefore more difficult.’
Others however are not satisfied with the proposed composition of the new
monitoring group, which currently looks to be represented by securities
regulators of the different major capital markets.
Transparency campaigner Richard Murphy, who has publicly opposed the IASB
over its lack of accountability, said the draft missed the point of the
monitoring group. ‘There is no recognition of other stakeholders who might have
an interest in financial reports prepared using IFRS… this body needs
representatives of civil society and some indication of a democratic process,’
IASB chairman Sir David Tweedie is thought to be comfortable with the
proposals and that they will not hinder his independence to determine the IASB’s
Issues surrounding the group’s role will be discussed at a series of
roundtables that begin on 13 June.
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