Tweedie warns US to adopt standards or lose influence

The US could be stripped of any influence over global financial rules if it
does not adopt them itself, the head of the international accounting standard
setter has warned.

Sir David Tweedie, chairman of the International Accounting Standards Board
(IASB), believes US influence on standard setting may diminish if it rejects
international accounting rules next year.

In an interview conducted earlier this year,
recently posted
online by
the Journal
of Accountancy
, Sir David said the US had a lot of influence on the creation
of accounting rules despite not actually using the rules domestically.

“One of the real dangers, if the US says no, is that there is a reaction and
[international observers] want the US influence diminished,” he said.

“You will find for example that the [US influence] on the standards will be
less, obviously, and if you decide to come in later on, you have standards that
perhaps you’re not too keen on, that you had no influence over.”

The US is still deciding whether to adopt international accounting rules. The
US standard setter, the Financial Accounting Standards Board, is attempting to
harmonise its accounting rules with international standards.

Meanwhile, the US securities regulator, the Securities and Exchange
Commission (SEC) is investigating the impact of international standards on US
markets and expects to make a final decision in next year.

Despite this, the US exerts considerable influence on standard setting. The
US has four individuals on the 15-member IASB and five trustees on the 22-member
oversight committee. SEC chairman, Mary Schapiro, also holds a seat on the
IASB’s supreme oversight body, the Monitoring Board.

Sir David said this was causing consternation among international observers.

“People are saying, ‘well, you are having an influence on our standards, but
aren’t willing to take them yourselves. Are you in or are you out?’,” he said.

“The message has been ‘do you want these standards or not and, if you don’t,
why should you have a major say in developing them’. That has really been the
underlying concern… the decision next year will change the whole atmosphere.”

Further reading:

US Role in IFRS

long and winding roadmap

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