Concerns are growing that the huge
volume of IFRS and US GAAP exposures drafts due for release in the
next six months will lead to lower quality standards.

The International Accounting Standards Board’s
(IASB) work plan lists 14 exposure drafts that have either been
released this month, or will be released by the end of the
year.

Most of these are being prepared in partnership
with the US Financial Accounting Standards Board (FASB).

Stig Enevoldsen, a Deloitte Denmark partner and
former European Financial Reporting Advisory Group (EFRAG) chair,
said the volume of drafts is difficult for stakeholders to deal
with.

“Because the IASB has so much on its plate we
may not get the best possible solutions,” he said.

“There is so much out for exposure so it is
difficult for [EFRAG] to get time to respond properly.

“It is a challenge to ensure we can respond at
the normal high technical level to that many exposure drafts
because it is like a tsunami right now.”

 

Due process concerns

The US-based Financial Executives International
(FEI) has written to the IASB and FASB to express concern that the
number of exposure drafts will affect the boards’ due
processes.

FEI warned that if the projects are not scaled
back, the boards will probably need to amend the standards in the
near-term “thereby potentially undermining the confidence in our
financial reporting system”.

US Securities and Exchange Commission chief
accountant James Kroeker has also said he would support the IASB
and FASB cutting the number of convergence projects due in June
2011 if there was good rationale for the delay.

Kroeker said it is more important to ensure
that a thorough exposure process takes place and the final
standards are a long term and sustainable solution.