The International Accounting Standards
Board (IASB) will be renamed the IFRS Board if proposals included
in the second part of the International Accounting Standards
Committee (IASC) Foundation’s constitution review are accepted. The
IASC Foundation, which oversees the IASB, would be renamed the IFRS
Foundation.
The proposals form the second stage of a
two-part review of the IASC Foundation constitution.
The review takes place every five years, the
most recent being in 2005. On this occasion the process was split
into two stages to fast track some urgent matters.
The first stage was completed in January this
year and resulted in the establishment of a monitoring board of
capital markets authorities to oversee the work of the IASC
Foundation. It also expanded the IASB from 14 to 16 members and
introduced guidelines for geographic diversity on the board.
The objective of the proposals in the second
stage of the review is to further enhance the governance of the
IASC Foundation, improve the involvement of stakeholders and make
operational improvements.
The five key proposals are:
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By GlobalData• Enhance the IASB agenda-setting processes by
making the board consult on its standard-setting agenda with the
trustees of the IASC Foundation and the Standards Advisory Council.
Other stakeholders could also comment;
• Emphasise the importance of the IASB
liaising with organisations including accounting standard setters
and other official organisations with an interest in the
standard-setting process;
• Establish a procedure for an accelerated due
process where a shorter period of consultation could be held when
major unforeseen developments arise;
• Mandate a geographic balance within the IASC
Foundation trustees, similar to that introduced for the IASB
earlier this year; and,
• Change the name of the IASB to the IFRS
Board and the IASC Foundation to the IFRS Foundation to provide
further clarity regarding their missions.
The move to enhance the governance of the IASC
Foundation and improve the IASB’s standard-setting process will be
welcomed by many jurisdictions around the world, including the two
largest.
Both the US and Japan have said governance
must be improved before they adopt IFRS.
The closing date for comments on the proposals
is 30 November.
