Today’s announcement by Paul Volker, International Accounting Standards Committee trustee and former US Federal Reserve chairman, is designed to please business, regulators, standard setters and investors from around the world.
The new board members include Hans-Georg Bruns of DaimlerChrysler, Anthony Cope of the US financial accounting standards board, Harry Schmid of Nestle and Tatsumi Yamada of ChuoAoyama Audit Corporation.
Speaking in New York, Volker said: ‘The board has been selected on the basis of experience and high professional qualifications. This group is exceptionally well qualified to ensure we reach the goal of globally accepted standards. The result should bring highly significant economic benefits to both the developed and emerging economies.’
Twelve of the 14 board members are appointed to full-time positions, including the chairman and vice chairman, which means they will have to give up their current careers. Two board members will work on a part time basis. The length of their tenures has not been finalised.
To ensure the IASC does not sit in an ‘ivory tower’, seven of the appointees will act as liaison officers to national standard-setters.
Sir David Tweedie, IASC board chairman, told Accountancy Age: ‘This is not meant to be a dictatorship. We can’t force people to accept our standards. We need a partnership. National standard setters can monitor our rules and if they are not happy, the rules can be altered at a later date.
‘The UK Accounting Standards Board’s role will increase rather than diminish,’ added Sir David, who is former chairman of the ASB.
The IASC board is expected to hold its first informal meeting in February where it will decide its agenda for the next three years. All other meetings will be open to the public, the first of which is scheduled for April.
It is widely expected that top of the list of priorities will be how to improve or delete the ‘opt-out’ clauses contained in the endorsement of one set of accounting standards by Iosco, the global club of securities regulators. These clauses allow individual countries to demand additional disclosure or reconciliation to its domestic standards.
Trustees are raising $10m (Pounds 6.86m) a year to fund the IASC which is expected to double the size of its staff in the next few months. Funding will come from accountancy firms, listed companies, regulators and banks – all organisations that will benefit from one set of global rules.
Countries with formal liaisons are Australia, New Zealand, Canada, France, Germany, Japan, the US and the UK. Board members are also expected to maintain frequent contact with financial regulators, central banks, private industry, analysts and academics throughout the world.
Other board members include Tom Jones, vice chairman of the new IASC board, Mary Barth, professor of accounting at the Graduate School of Business, Stanford University, Robert Garnett, executive vice-president of finance for Anglo American plc, Gilbert Gelard, partner of KPMG, France, Robert Herz, partner at PricewaterhouseCoopers, James Leisenring, director of international activities of the US Financial Accounting Standards Board, Warren McGregor, co-founder of Stevenson McGregor, Australia, Patricia O’Malley, chair of the Accounting Standards Board of Canada and Geoffrey Whittington, PwC professor of financial accounting at Cambridge University.
The establishment of the new IASC will undoubtedly see the demise of the G4 +1 group, which has worked together on some of the most controversial accounting standards, such as those dealing with accounting for share options and financial instruments.
Under the IASC’s new constitution all board members have been selected by the 19 Trustees on technical capability and not country representative.
To achieve a broad and representative balance of perspectives, a standards advisory council will also be created in March.