ICAS appeal for progress
29 Jun 09
Chief executives of GAA united in call to keep momentum going
ICAS chief executive Anton Colella, together with his counterparts from the world’s leading accounting
bodies, has called for politicians to continue moving towards a single set of global accounting standards.
The appeal to governments not to hold up progress towards a global financial reporting regime came from the chief executives of the Global Accounting Alliance (GAA), who met in Edinburgh last month.
The demand came as European finance ministers met to discuss the issue of accounting standards in relation to the financial crisis. The GAA also set out three key steps to keep the momentum of accounting standards reform going:
• the standard setter should improve its engagement with stakeholders
• all parties should commit to global consultation and a single set of accounting standards
• all parties need to acknowledge that to produce high-quality standards takes time.
The chief executives of the GAA, which includes ICAS, the Institute of Chartered Accountants in England and Wales, plus accountancy institutes in America, Canada, Hong Kong, Australia, New Zealand, South Africa and Japan, represent more than 775,000 of the world’s leading professional accountants in more than 140 countries from around the globe. They agreed the following statement:
“We believe that all relevant authorities and stakeholders should work to support the creation of a single set of high-quality global accounting standards, as mandated by the London G20 Summit communiqué in April... any short-term difficulties in achieving this aim need to be resolved as soon as possible to ensure the long-term goal of global convergence stays in place.
“The reality is that international negotiations can be a slow and difficult process, but this is not a reason for giving up… the interests of one constituency should not come before the broader goal of truly global standards that are of the highest quality and independent of political interference. Delivering on this commitment is a critical component in helping to rebuild investor confidence and securing a sustainable economic recovery for the long term.
“The response to the financial crisis, by all relevant parties, has threatened the progress of global convergence to IFRS. We believe that the following three steps will help to get the shared objective of a single high-quality set of accounting standards back on track:
1. The standard setter should improve its engagement with stakeholders
Greater transparency, better communication, and increased accountability on behalf of the standard setter for IFRS will be necessary to make progress on the G20 commitment. The standard setter must learn to better manage interested stakeholders. This should include establishing a robust protocol system for drafting its agenda and prioritising its workload, including how it will take forward emergency measures. Such improvements are essential in order to manage different pressures that, as a global body, it will naturally be subjected to.
2. All parties should commit to global consultation and a single set of accounting standards
Carrying forward the G20 London Summit communiqué, relevant authorities in jurisdictions that have adopted IFRS, and those that are considering the adoption of IFRS, should make a sustained effort to commit to the global consultation process for standards in order to achieve a single set of high-quality global accounting standards.
3. All parties need to acknowledge that to produce high-qualitystandards takes time
Amending standards for financial instruments is complicated. Weneed to be sure that all stakeholders are consulted, allowing propertime for consultation, and that allthe difficult issues are fully considered. This demands that due process for consultation is carried out. It is not in the interests of any stakeholder, across accountancy, insurance, banking or others, for changes to be rushed through in a piecemeal fashion and withinadequate time for properimplementation.”