To be most effective, international financial reporting standards should be field-tested prior to adoption, and the international standard setter needs to more clearly communicate its processes while gathering stakeholders’ opinions, a group of global accounting leaders including AICPA President and CEO Barry Melancon told the representatives of the International Accounting Standards Board during an October roundtable discussion in New York City.
The round table was one of several taking place around the globe as the second part of a two-part review and public comment period of the constitution of the International Accounting Standards Committee Foundation (IASCF), the IASB’s oversight body that is required to review its constitution every five years.
Field testing has been discussed in the past, but those at the round table stressed the importance of doing so when setting financial reporting standards.
A separate area of particular importance to the AICPA is the need for a permanent independent funding source for the IASB.
The IASB’s 14 members come from nine countries, including the United States. It is funded by contributions from major accounting firms, private financial institutions and industrial companies, central and development banks, and other international and professional organizations throughout the world.
During the round table, Melancon reiterated the AICPA’s point of view, stating, “a permanent funding solution would ensure that the IASB has appropriate resources to carry out its mission and would lead to worldwide confidence in the IASB’s role as an independent accounting standard setter.”
In an April 9 comment letter to the SEC, Melancon encouraged the commission to use part of the current levy on U.S. public companies for accounting standard-setting activities as a permanent funding source for the IASB.
The consultation document Part 2 of the Constitution Review—Proposals for Enhanced Public Accountability can be viewed on the “Open to Comment” section on the IASC Foundation Web site (iasb.org).