Financial Reporting IAS round table
Six influential members of the Standards
Advisory Council, which gives technical
guidance and feedback to the IASB on
behalf of the world' s business
community, gathered recently and
offered John House their opinions on the
IASB' s progress to date
It has been over a year and half since the International Accounting Standards Board began operating as a full-time standard-setter. The board has met with praise and criticism as it has laboured to prepare its standards for wholesale adoption within the European Union. caught up with six members of the IASB' s Standards Advisory Council, the 45-member committee of
Sitting at the round table were:
Norman Strauss, retired national director of accounting, Ernst & Young, US Peter Wilmot, SAC chairman and South African Accounting Practices Board chairman Stig Enevoldsen, national technical director, Deloitte & Touche, Denmark Nelson Carvalho, president, Central and South American regions, International Association of Financial Executives Institute Reyaz Mihular, chairman, Sri Lankan Accounting Standards Committee David Damant, UK analyst, Sword Management
preparers, auditors, users and regulators who give technical guidance and feedback to the standard-setters on behalf of the world' s business community.
The SAC was holding a routine meeting with the IASB in London to talk about the board' s revised version of the troubled financial instruments standard,, Financial Instruments: Recognition and Measurement. We asked Peter Wilmot, Stig Enevoldsen, Norman Strauss, David Damant, Nelson Carvalho and Reyaz Mihular to give their opinions on the IASB' s progress to date.
Norman Strauss: I believe that the US scandals aren' t necessarily indicative of poor accounting principles. I believe the bulk of those happened because the perpetrators didn' t follow US GAAP. There were some cases where the US standards could have been better: consolidation of special purpose entities, for example. However, the companies charged with filing false financials generally didn' t follow the US rules.
The US FASB felt that some of the US rules should be strengthened. And they want greater convergence with international standards. But I don' t know that it' s necessarily because of a perception-that US standards are poor and that they' ll be improved by adopting IAS.
Strauss: Yes, the US is considering moving towards principles-based accounting. But I think there' s probably more in the perception than the reality of principles versus rules-based accounting. While some people say IASs are principles-based, if you pick up some of them you' ll find plenty of rules and there' s generally a need to have some guidance. I don' t think it' s clearly rules versus principles. Even if you start with a principle you still need a lot of guidance.