RegulationAccounting StandardsOn the money with Gavin Hinks

On the money with Gavin Hinks

Last Friday, French president Nicholas Sarkozy seemed to be threatening to change the face accountancy ­ or rather stick the boot into fair value. In other words he wanted it gone

Gavin Hinks, editor of AccountancyAge

Perhaps, that’s a little unfair because his early statements were about
suspension. But it’s interesting to see politicians wade into accounting issues.

What puzzles me is whose interests were uppermost in his mind. The IASB has
worked hard to convince everyone that it serves investors and that this is the
purpose of its standards, including fair value.

So when Sarko aimed his foot, he was thinking of the banks. They had clearly
convinced him that fair value had to go.

I can’t help feeling that this is because wealthy bank managers spend more
time hobnobbing with the political elite than the investor bodies, who are more
likely to spend their time talking to officials.

Political intervention has not been welcomed with open arms. Senior UK
professionals are incensed at the use of accounting as a ‘political football’
when politicians ‘know even less than the rest of the world’. Their words, and I
report them faithfully.

That would be why we have a standard setter that doesn’t answer to any
national government or group of politicians. Interestingly, all European
governments are now interested in acting as one. That’s precisely the principle
underlying the IASB and allowing it to set the standards ­ so that no single
nation should go it alone.

In the end Sarkozy, Brown, Merkel and Berlosconi pulled back from the brink.
But when I see how much pressure they exerted, and how close they seemed to be
to wresting standards from the standard setters, I can’t help thinking that’s
why we made central banks independent. Discuss.

Gavin Hinks is the editor of Accountancy Age

Related Articles

Demystifying GDPR for accountants

Accounting Standards Demystifying GDPR for accountants

1w Ellen Temperton, Lewis Silkin
EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

2m Emma Smith, Managing Editor
The great professional services shake-up

Accounting Standards The great professional services shake-up

3m Fergus Payne, Lewis Silkin
What do clients actually want from an accountant?

Accounting Standards What do clients actually want from an accountant?

4m Emma Smith, Managing Editor
Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

Accounting Standards Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

4m Alison Conley
Membership of the accountancy profession on the rise

Accounting Standards Membership of the accountancy profession on the rise

5m Alia Shoaib, Reporter
The real price of mates' rates in the provision of professional services

Accounting Standards The real price of mates' rates in the provision of professional services

5m DAC Beachcroft
IASB overhauls insurance accounting with issuance of IFRS 17

Accounting Standards IASB overhauls insurance accounting with issuance of IFRS 17

7m Alia Shoaib, Reporter