At least it was, until the papers reported at the weekend that the US
financial watchdog in chief, Mary Schapiro, wasn’t too keen.
Apparently she believes domestic issues take precedence, which has left
European officials (no doubt the source of the story) red faced.
But what to do? Certainly the conventional wisdom is that the Great Crash of
1929 was turned into a depression by the protectionist reaction of economies
around the world.
The mantra among regulators and some politicians in the recent dire situation
has been ‘global solutions to global problems’. Indeed, the work on
international standards is held up by many as an example of how global
regulation can work.
Of course, the
IASB is really a
global rule maker. It’s no enforcer, which mean national governments and
organisations are left to make sure companies tow the line.
In recent months, we have seen the pressure governments can exert to change
the rules if they don’t suit their purpose.
But an interesting conundrum seems to be emerging. Big auditors are becoming
properly international. They are starting to merge national practices and
international umbrella bodies are becoming more influential in the setting of
standards for work anywhere in the world.
But who regulates them? The fact is that nobody regulates international
bodies, they only regulate national firms.
Key players are piling the pressure on international bodies through the
courts – BDO
International over Banco Espirito,
Thornton over Parmalat. But if those organisations are found wanting, cases
proved, there’s no regulator to take action.
Don’t be surprised if that conversation starts to be had in very high places
Gavin Hinks is editor of Accountancy Age
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