Big Four firm backs G20 accounting stance

A Big Four firm has backed the G20’s call for global accounting rules, and
has described convergence as a “critical step” as nations move towards adopting
international accounting rules.

James Turley, Ernst & Young’s global chairman and chief executive officer
said it was “imperative” that the world have one global set of accounting
standards to provide investors with the best information.

“It is imperative that there is one set of financial reporting standards for
the world if the quality and comparability of investor information is to be
protected,” he said.

World leaders have reaffirmed their commitment to global standards at the
meeting of G20 nations in Pittsburgh, providing renewed political impetus to
convergence discussions between US and the international standard setter.

In a statement the leaders said they: “call on our international accounting
bodies to redouble their efforts to achieve a single set of high quality, global
accounting standards within the context of their independent standard setting
process, and complete their convergence project by June 2011.”

“The International Accounting Standards Board’s (IASB) institutional
framework should further enhance the involvement of various stakeholders.”

Turley said he was pleased to see the G20 renew its call for a single set of
high quality global accounting standards and that all countries must ultimately
commit to adopt international accounting rules.

“The past 18 months have shown just how globally connected the economies of
the world have become. Convergence is a critical step in countries moving to a
single set of financial reporting standards. However, that alone will not
achieve the goal of one global financial reporting language,” he said.

“If the world doesn’t coalesce and adopt common standards, then local
political and industry influence are able to play one standard setter off of the
other, creating a race to the bottom,” Turley said. “That is a losing
prescription for global economic growth and development, not to mention
transparency to investors.”

Related reading