Recent press comment in London has highlighted the diversity ofPwC. accounting regulation in Asia Pacific. Investors and financiers across the world are rightly stepping up the pressure to achieve the transparency of financial reporting that will come from the adoption of International Accounting Standards. National regulators take heed.
Some Asian governments have mandated the use of international standards as they were published. Others continue to develop historical national frameworks – rules of reporting not aimed at supporting investment decisions.
International financiers are now realising – to their cost – the need to be ‘accounting polyglots’ in a world where corporate regulation continues to be dominated by national agendas. Nearer to home, cross-border financial reporting may not be much easier.
In the European Union, common financial reporting formats are mandated – the result of implementing the 1970s accounts directives. Companies in 11 of the member states will also soon start to report in euros.
Yet each government has implemented the directives in a subtly different way. Faced with accounts in the same layout and the same currency, it will be all too easy to forget the underlying differences.
Five EU countries have taken steps to allow major corporations to use IAS rather than national standards – welcome progress in a confusing world. But they must still comply with the 1970s laws. Management and auditors alike face a considerable challenge where the law and IAS conflict. Which will be predominant?
Twenty-five years ago, the accounting profession took a bold step in setting up the International Accounting Standards Committee. The time has now come for governments across the world to work with each other, and with us, to remove the barriers to the use of international standards. Mary Keegan is head of the global corporate reporting group of PwC
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