A new report from the European Parliament (EP) has called for
more transparency and greater geographic representation within the
International Accounting Standards Board (IASB). The report
outlined European concerns about the governance of the IASB and the
International Accounting Standards Committee Foundation (IASC)
trustees. It was adopted by Members of the European Parliament
after a vote on the proposals.
The EP welcomed recent efforts by the IASB to address governance,
including proposals to set up a monitoring body for the trustees
and to change the geographical composition and size of the
IASB.
However, the report argued more needs to be done, including a
debate on integrating the IASB into a system of international
governance with the International Monetary Fund, Organisation for
Economic Co-operation and Development and the World Bank.
The report said that since the EU is the largest jurisdiction to
adopt IFRS, there should be more European representatives in the
standard-setting body and that all trustees of the IASB should come
from nations that have either signed up to the IFRS or intend to do
so.
The EP wants a prior assessment of the impact and merits of changes
for European companies and users of financial statements before
convergence with third-country standards, such as US GAAP, takes
place.
It also wants an independent oversight body to monitor the IASC and
IASB, which would consist of market participants, deliver an annual
report and be responsible for appointing trustees in a transparent
manner.
In terms of IASB funding, the EP said all the user groups should be
adequately involved, there should be no conflict of interest
between financiers and users and access to the standards should be
made universal.
The report also criticised the controversial draft IFRS for SMEs,
claiming it was far too complicated and that the EC should arrange
a proper consultation procedure for an EU accounting framework for
SMEs.
