The increasingly international nature of
the American Accounting Association’s (AAA) annual meeting, held in
New York this month, was one of the three most interesting points
to arise from the event, according to one attendee.

The AAA is a national organisation that
focuses on accounting education and research.

Institute of Chartered Accountants in England
and Wales (ICAEW) executive director Robert Hodgkinson represented
the institute at the event. He said the increasingly international
focus of the US is good for everyone.

“Four years ago, when I first went [to an AAA
annual meeting] we had a panel session organised, but it was quite
difficult as a non-US body. It was on a topic that compared US and
UK corporate governance and there was a little bit of puzzlement as
to who would be particularly interested in things happening outside
the US,” Hodgkinson said.

That attitude has transformed completely. AAA
membership now includes many people from outside the US and
attendance at the conference was quite international. The interest
of US academics in international matter is also far greater,
Hodgkinson said.

The second interesting change Hodgkinson
witnessed was the “unsettling effects of IFRS on the US”.

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“You need to bear in mind that in the US, the
universities do substantially all the training for the accounting
profession. So the big decisions about ‘when do we switch to
teaching people IFRS’ and ‘are the better students going to want
more internationally-orientated courses’ are big issues,” he

“For a generation of accounting professors
this is quite unsettling.”

One of the speakers at the event was
International Accounting Standards Board chairman David Tweedie,
who said other countries are running out of patience waiting for
the US Securities and Exchange Commission to decide on whether to
approve a road map for transitioning to IFRS. He said the US needs
to commit by 2011.

Hodgkinson said the academic community
probably agrees with Tweedie’s sentiment that the US business
community needs to decide what it was doing regarding IFRS because
of the current uncertainty.

The third particularly interesting point was
that there was a plenary session on sustainability issues,
Hodgkinson said. He explained that it is new for the AAA to have an
interest in environmental reporting and sustainability.

“That is quite encouraging for us as a body
that not only has publications on sustainability issues but also a
business for sustainability training programme,” he said.

“I think that’s interesting, encouraging and
also perhaps a sign of the changing political environment. Although
there is plenty of frustration as to whether the right sort of
legislation will get through Congress on cap and trade schemes and
so on, it does signal a bit of a change that you would have a
plenary session with two people talking about sustainability

ICAEW role

The ICAEW organised several panel
sessions at the AAA event. One featured US Financial Accounting
Standards Board chairman Bob Herz and discussed how financial
reporting may or may not contribute to financial stability.

The other three panel members were Sarah Smith
of Goldman Sachs, Haresh Sapra of the University of Chicago Booth
School of Business and Stephen Ryan of the New York University
Stern School of Business.

Hodgkinson said that although the four
speakers’ perspectives were quite different, they were quite
cognisant in that nobody was saying there was an easy solution
whereby financial reporting could be changed to make the markets
safe from business cycles.

Another theme that Hodgkinson said arose from
the event and from the financial crisis in general is that when new
accounting regimes are introduced there needs to be a better
understanding of how they will interact with business

“We probably need to be a little bit smarter
in anticipating the potential adverse consequences,” he

One question that arose from the floor was
whether there needs to be a rethink of the use of the incurred loss
model of provisioning rather than a more economically based
expected loss model.

Hodgkinson said the consensus from the panel
was ‘absolutely, we do’. He added that although no one wants to
revert to cookie jar accounting “maybe we did have a model that was
just too late in recognising losses or anticipated losses”.