IASC monitoring body
The world’s largest securities
regulators have proposed the International Accounting Standards
Committee (IASC) Foundation establish a new monitoring body for the
International Accounting Standards Board (IASB) in order to improve
public accountability.
The authorities, who include European Commissioner for Internal
Market and Services Charlie McCreevy, Financial Services Agency of
Japan commissioner Takafumi Sato, International Organization of
Securities Commissions executive committee chairperson Jane Diplock
and US Securities and Exchange Commission chairman Christopher Cox,
plan to flag the idea in collaboration with the IASC during a 2008
review of the foundation’s constitution. They said a monitoring
body would complement the IASC trustees in its representation of
the interest of the global investor community, thereby enhancing
public confidence in IFRS.
The regulators said: “We have a common interest of ensuring
continuing user confidence in the institutions responsible for the
development of global accounting standards. A natural step in the
institutional development of the IASB and the IASC Foundation would
be to establish a means of accountability to those governmental
authorities charged with protecting investors and regulating
capital markets. We will work together to achieve these
objectives.”
A key objective of the monitoring body would be to meet regularly
with IASC Foundation trustees to discuss, review and comment on the
IASB’s work programme, the regulators explained. The monitoring
body would have a role to play in the selection of trustees and be
responsible for the final approval of trustee nominees. Finally,
the regulators propose the body would have the opportunity to
review the trustees’ procedures for overseeing the standard-setting
process and ensure the IASB’s proper funding.
The announcement follows the IASC’s own strategy review of its
governance and public accountability issues. The trustees announced
several proposals to improve accountability, including expanding
the funding regime, establishing a formal reporting link to
official organisations and developing a multi-layered approach to
accountability.
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By GlobalData
IASC GOVERNANCE REVIEW
Key proposals to enhance public accountability
Global regulators
• Establish a monitoring body within IASC governance structure
to review and comment on the IASB’s work programme. Body would
represent interests of the global investor community.
IASC Foundation proposals
• Establish a formal reporting link to official organisations
including securities regulators;
• Deepen engagement and receive input from organisations and
key stakeholders outside of formalised procedures;
• Create a mechanism for public input to the trustees outside
regularly scheduled meetings with specific stakeholder groups;
and
• Continue efforts towards a sustained, broad-based funding
regime.
