Refusnik McCreevy is a sign of the great divide

A memorandum of understanding for the International Accounting Standards
Committee Foundation was signed in April. The chief US financial regulator
signed it, his opposite number in Japan signed it. Gerrit Zalm, who chairs the
board of trustees signed up, as did the chairman of the International
Organisation of Securities Commissions.

But look at the memo and you see the EC commissioner did not. He has been
attending meetings, but he can’t bring himself to make a commitment on paper.

The answer to this is that McCreevy is under political pressure to withhold a
commitment because there remain deep misgivings in Europe about the role of the

Privately this is interpreted as discontent with IASB chairman Sir David
Tweedie. He has ruffled feathers and refuses to go along with the European way
of doing things – though he has made key concessions since the financial crisis.
Perhaps what galls European politicians more is he cannot be controlled because
he is not fully accountable.

But sending such a clear signal that there is little support for the IASB is
a dangerous game at a time when unified thinking and co-operation is required.
In short, it risks undermining the whole international standards project. And
perhaps that is the aim. It’s no secret that there have been discussions about
founding a European standard setter.

But refusing to sign reveals new depths to the fissure that has opened up
over IFRS.

Clearly Europe is holding the door open in case it needs to withdraw. And
that cannot be good for either accounting and or the markets.

Related reading

Fiona Westwood of Smith and Williamson.