Proposals to overhaul the international standard-setting system cameproposals. under fire from all directions this week, as the European Commission said the new regime lacked accountability while regulators in the US warned that the changes did not go far enough.
The International Accounting Standards Committee strategy paper was published last December. It has been broadly endorsed by the UK Accounting Standards Board, though it suggested the standards development committee be expanded from 11 to 16 members, and the IASC board be given the power to delay, but not veto, standards proposed by the committee.
But Karel van Hulle, head of the European Commission’s accounting standards unit, said the ASB proposals were ‘fudging the issues’ of democratic control.
‘After consulting with member states, we have noted that people are very worried about the lack of democracy. How can you create a global standard-setter where the people concerned have no say?’
Both ACCA and the European Commission are likely to call for an expanded IASC board with full veto powers.
The US Financial Accounting Standards Board said last month it thought the proposed IASC would still be too slow to respond to the demands of capital markets. FASB hinted it could set itself up as a rival to the international body, a view backed by the American Institute of Certified Public Accountants.
Some observers have warned that the apparent lack of common ground may threaten the viability of the IASC.
The ASB also lobbied for new financial reporting presentation methods at a working party meeting this week. The working party was convened to consider proposals for measuring financial instruments such as derivatives and related hedges at their market values.
The proposals are due to be published by the end of the year and will supersede IAS 39 ‘Financial Instruments’, which was agreed last December as part of the IASC’s core reporting package.
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