International accounting body in bid to ramp up its authority

 
City A.M. Reporter
THE WORLD’S top accounting rulesetter unveiled plans yesterday aimed at buttressing its authority and independence in the face of calls from European groups for a greater say in how new standards are shaped.

The International Accounting Standards Board (IASB) proposed yesterday an Accounting Standards Advisory Forum comprising 12 members from across the world.

The board currently relies on informal, bilateral contacts with scores of national accounting bodies for input into writing new rules but this has become unwieldy.

“The answer is to establish a multilateral forum where representatives of the standard-setting community can come together with the IASB,” said IASB chairman Hans Hoogervorst.

Hoogervorst proposes giving Europe three seats, the same as for the Americas and for Asia-Oceania. It would meet for just a day and a half, four times a year in London and, crucially, be chaired by the IASB.

Members would have to sign up to promoting a single set of global standards and respect the IASB’s independence.

The IASB plan is in effect an opening gambit as national standard setters have already filed a counter proposal to the IASB that proposes a board with up to 20 seats and far greater parity between the IASB and national standard setters.

The IASB writes rules used in over 100 countries, giving it clout that critics say calls for much greater accountability.

Accounting standards setting has become politically charged since the financial crisis, as policymakers realise the reach that rules can have – such as making banks recognise losses earlier in future, before taxpayer bailouts are needed.