The Institute of Chartered Accounts in England
and Wales (ICAEW) has warned that proposed changes to IFRS
Foundation governance structure could damage the credibility of
global accounting standards.

ICAEW financial reporting faculty head Nigel
Sleigh-Johnson said the institute is concerned that widening the
monitoring board remit could potentially damage the independence of
the International Accounting Standards Board (IASB), which would
“ultimately endanger the credibility of international financial

In February, the IFRS Foundation proposed its
Monitoring Board was involved in the selection of the IASB chair,
could place items on the IASB agenda and should establish a
permanent secretariat.

“The IASB’s oversight structure is already
complex. Expanding the Monitoring Board’s role would create
overlaps with the other oversight bodies and increase complexity,”
Sleigh-Johnson said.

“It is also vital that technical
independence of the IASB is protected. In order to maintain public
confidence, it is essential that standards setters are not placed
in a position where they could encounter undue political influence.
Some of these proposals could open the way for this to happen,
which would mean the IASB’s work becoming unduly politicised.”

Sleigh-Johnson said if IFRS was altered to
suit the needs of regulators rather than investors, there would be
confusion over its objectives and this could lead to a loss of
confidence in financial reporting.

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