English ICA supports international accounting standards
International accounting standards are now sufficiently comprehensive for use in financial statements, according to the English ICA.
In its response to questions about the acceptability of international accounting standards published by the US Securities and Exchange Commission, the institute said they did not seem relevant to the core question of whether the international standards were adequate for use by capital markets.
English ICA deputy president Graham Ward said: ‘We have long looked forward to the time when financial statements prepared in accordance with international accounting standards are recognised by stock exchanges throughout the world. This prospect moved closer to reality with IASC’s recent completion of the programme of core standards agreed with IOSCO in 1995. It should result in improved access to cross-border capital and lower costs for business.’
Ward added that the SEC should not seek to use these points to establish barriers to the global acceptance of IASC standards, which should be implemented as they stand throughout the world.
The institute’s principal observations were that the core IASC standards provided a sufficiently comprehensive basis for the preparation and presentation of reliable financial statements.
It said that in many areas, IASC standards are similar or identical to UK Financial Reporting Standards -particularly for new standards that have already been implemented in UK GAAP.
It also said standards will need to continue developing in order to meet the needs of the changing business environment and to address the remaining areas of the IASC agenda.
‘It is important that the SEC and other regulatory bodies, including the European Commission, give their support to the core standards as well as participating fully in the process for developing new standards, rather than reviewing each standard after it has been produced,’ the institute said.
In view of the extensive consultation process involved and the new IASC structure, the SEC and other regulatory bodies should accept financial statements based on IASC standards without any reconciliation requirement, to US GAAP.
The institute also called for a global enforcement mechanism to promote the uniform application of IASC standards.