Hopes for a single global standard-setting body have been booste after the International Accounting Standards Committee killed off plans to introduce a two-tier board.
In a compromise presented to the IASC board meeting in Warsaw last week, secretary general Sir Bryan Carsberg and chairman Stig Enevoldsen abandoned the idea of a standards development committee that would have drafted proposals for main IASC board approval.
They opted instead for a single board of 25 members designed to keep warring factions at the negotiating table.
The committee’s relationship with the IASC board provoked strong reactions from the US contingent, who felt it would slow progress, and from the European Commission, which felt it was not democratic enough.
The new plan puts forward a board of 15 full-time standard setters and 10 part-time members. All of these would be drawn from business and political circles, with a similar role to non-executive directors in business.
‘The key to the proposals is making sure the Americans don’t walk,’ said Accounting Standards Board chairman Sir David Tweedie, who sits on the IASC board. ‘Their initial reaction was that this could be a basis for going forward.’
But European Commission financial information and company law unit head Karel Van Hulle was less supportive.
He welcomed the move to ditch the two-tier system, but warned standard-setters were not the only ones who should contribute.
He said that a future IASC should be more representative of those applying accounting standards.
‘I think the problem lies in how this will work in practice. This cannot be legitimised unless you have all interested parties on board. We will certainly be commenting on the proposals over the next few months,’ he said.
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