The head of the body overseeing the work of the International Accounting
Standards Board has taken the extraordinary step of writing to President Bush
urging international leaders at the G20 meeting in Washington to support the
independence of the IASB and leave it to get on with its work.
Gerrit Zalm, chairman of the IASB’s trustees, reiterated all the work the
board is doing as part of efforts to resolve the credit crisis ahead but said:
‘The success so far achieved should not be compromised by actions that would
weaken the independence of the standard setting process.’
The letter comes ahead of the meeting on Saturday which has accounting and
standard setting firmly on its agenda.
Nicholas Sarkozy will go to the meeting with a statement signed by EU heads
of state saying accounting standard setters will need to be ‘reformed’ to allow
closer cooperation with institutions guarding financial stability. The proposal
is seen as a move that could lead to demands for stability to be written into
the remit of the IASB, a measure viewed as conflicting with its central role of
promoting transparency and comparability.
In the G20 letter, Zalm attempts to head off that prospect by stating that
the IASB has already begun a dialogue with the Basel Committee on banking
However, Zalm adds: ‘At the same time the primary aim of accounting
standard-setters (and securities regulators) is to provide transparency and
comparability of financial information for investors and participants in capital
markets – an objective that should not be sacrificed.’
Zalm also addresses efforts behind the scenes in Brussels to circumvent the
IASB and drop requirements for fair value accounting, much criticised by
politcians and corporate leaders in the US.
‘The trustees believe that any steps taken outside the well-established and
supported stand-setting process to amend fair value accounting would further
undermine already scarce confidence in financial markets. Therefore efforts to
improve financial reporting should be led and completed expeditiously by the
IASB in order to ensure globally coordinated approach,’ Zalm writes.
Zalm asks President Bush to circulate his letter to the G20 leaders
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