ACCOUNTING : INTERNATIONAL COOPERATION ON GOVERNANCE OF ACCOUNTING BODY.
The financial regulatory authorities of the EU, US and Japan have got together with the International Organisation of Securities Commissions (IOSCO) to agree improvements to the governance of the International Accounting Standards Committee Foundation (IASC). This is the body that oversees the International Accounting standards board, which in turn sets international financial reporting standards (IFRS).
The announcement came on 7 November in a joint statement from the EU's Internal Market Commissioner Charlie McCreevy, Commissioner Takafumi Sato of the Japanese Financial Services Agency, Chris Cox of the US Securities and Exchange Commission and Executive Committee Chairperson of IOSCO Jane Diplock. They promised to work together to "establish a means of accountability to those governmental authorities charged with protecting investors and regulating capital markets".
The agreement will give greater clout to the review of the IASC Foundation's constitution scheduled for early in 2008. The IASC is an independent body, run by 14 self-electing trustees and for some time there has been concern as to its public accountability. In concrete terms, the agreement proposes to establish a new monitoring body to meet regularly with the trustees, review the work of the IASB, report to public authorities and approve the selection of trustees.
One crucial issue not mentioned in the statement is the funding of the IASC. From its inception, the body has been largely funded by the major accounting firms (receiving 35% from the big four firms) and, although around 100 countries now use the IFRS, the funding base has remained with the major western countries. Part of the trustees mandate from the 2005 constitutional review was to step up efforts to widen this funding base (see Europolitics 3341).
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|Date:||Nov 8, 2007|
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