The International Organisation of Securities Commissions, commonly known as Iosco, gave its approval at its annual meeting this week in Sydney to the standards developed by International Accounting Standards Committee to aid multinationals in cross-border offerings and listing.
Although it has no legal powers of enforcement, Iosco’s decision to recommend that stock exchanges allow the use of IASs is an important step forward for the concept. The decision also helps to allay growing fears that the US is angling for its standards to be accepted worldwide.
The move, however, is still viewed by many as tepid. The Iosco’s ruling contains provisions to allow domestic regulators some freedom to demand compliance to their own rules when a specific IASC standard is contrary to domestic or regional regulation.
Ted Awty, head of assurance at KPMG, said: ‘We welcome IOSCO’s endorsement of international accounting standards. I should have liked the endorsement to be more wholehearted.
‘We are disappointed that IOSCO did not feel able to recommend acceptance of international standards without certain reconciliations,’ he added.
The IOSCO’s provision to permit national regulators to waive cetain standards in exceptional circumstances is understood to be satisfactory to the SEC, the US financial services watchdog. But, said Awty, it could have the effect of undermining the benefits of harmonisation.
Awty threw down the gauntlet for the SEC to take the plunge in accepting the global accounting rules without supplementary reconciliation to US standards.
The SEC is currently in the process of deciding what its requirements should be for future filing in the United States.
The IOSCO praised the IAS committee’s efforts in producing the standards. But, Michel Prada, IOSCO technical committee chairman, emphasised the need to look forward and focus on evolving and existing issues.
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