Global Reporting Standards are gaining popularity among investors and finance executives, according to a new report by ACCA. Around 170 senior executives and investors were questioned. More than 40% said international financial reporting standards improve access to capital, while around 25% believe the global standards have lowered capital costs. ACCA chief executive Helen Brand said: “Growing support amongst CFOs and investors for [IFRS] must be considered carefully” by US regulator the SEC as it debates converging US GAAP with international standards. “We believe a positive answer from the SEC would give a tremendous boost to the cause of financial reporting and more importantly the world economy.” [Accountancy Age, Earlier]
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Some French Guy Still Trying To Tell the U.S. What to Do Re: IFRS
Look, pal. We get that you’re anxious to slap these sets of accounting rules together like an IKEA ottoman. We also get that you and a certain knight want – nay – need the RW&B to be on board.
But we don’t know who you’re trying to boss here. See, we’re fairly certain you’d be speaking German if it wasn’t for us. Furthermore, in case you haven’t noticed, we like dragging things out until the last possible minute. Or just ignoring things until we have a giant mess on our hands and then we try cleaning up. Why would we treat IFRS any different?
We understand it’s a new century, millennium and you guys have a rough go in the World Cup but you can give it a rest.
We’ll get to IFRS when we’re good and ready and just because today is Bob Herz’s last day at the FASB doesn’t mean you need to get all anxious about it:
The US is due to make a decision about whether fully buy in to international standards in the latter half of next year. There has been speculation that the appointment of a new chairman for the US standard setter, FASB, could determine which way the world’s biggest economy will go on international standards.
In a speech yesterday to a conference organised by European financial think tank EUROFI, Barnier welcomed the involvement of the US in the Basel talks on financial regulation. But he added that the US should not part company with IFRS.
“It’s essential that we adopt the same prudential framework. I say this very simply, we cannot afford to take the risk of divergence in this area. And this is also the case for accounting standards,” he said.
EU chief urges US to buy into IFRS [Accountancy Age]
What’s on Incoming IASB Chairman Hans Hoogervorst’s Plate?
Your next IASB chairman, Hans Hoogervorst, already has a few things on his to do list (right after scratching Sir David Tweedie’s name off the door), one of which involves restoring investor confidence by redoing last year’s bank stress tests in Europe since it seems they were not really credible, “One reason for scepticism was that sovereign bonds on the banking book were deemed to retain their full value, despite the fact that many were trading at steep discounts in the market,” he said. “The fact that some Irish banks that had passed the test later turned out to be insolvent only served to reinforce the doubts in the market.”
Doubts? That’s a kind way to put it.
Speaking at the two-day European Commission financial reporting and auditing conference, Hoogervorst also wanted to make sure everyone is clear on who rules the IASB. Despite appearances that rules are made by a handful of influential Europeans who like to play with accounting regs, he insisted the IASB is a multi-national group in which everyone gets a say. Or rather, he insisted that he’ll be trying to make sure the IASB is perceived as such, “It’s very important that we develop a governance structure that is more inclusive. At all costs we should avoid the perception that IFRS is dominated by a small group of nations,” he said. He did not seem to clarify if he was more worried about the actual structure of the IASB or just the appearance, nor did he mention how many U.S. delegates will have at the IASB’S table if we were to stop dragging our feet and just adopt already.
While auditors are taking a lot of heat for failing to catch just how bad off European banks were, H-squared doesn’t seem to feel they deserve so much criticism as they were simply following the rules. “How critical will auditors be when they see that regulators consider that severely discounted securities carry no risk?” he asked, obviously rhetorically.
Also in attendance at the conference, Federal Reserve senior associate director and chief accountant Arthur Lindo, who is hopeful that we here on this side of the pond will “move diligently towards some form of IFRS in the near future.” What Lindo did not say was whether or not the Fed would also adopt these rules or continue to use their freakish hybrid of GAAP and government accounting that they make up each and every year. Perhaps convergence will mean throwing in some IFRS into their 300+ page financial accounting manual.
Looks like Hans is going to have his hands full for the foreseeable future. Veel geluk met dat!
Accounting chief calls for more credible bank test [Reuters]
Michael Bloomberg Is a U.S. GAAP Man
Merging the iconic New York Stock Exchange with Germany’s Deutsche Boerse AG will force European companies to switch to using U.S. accounting rules which have superior disclosures, Mayor Michael Bloomberg said on Friday.” This will force a common set of accounting standards on the world; the American disclosures are better,” Bloomberg said on his weekly WOR radio show, though he admitted U.S. rules did not prevent Bernard Madoff from swindling billions of dollars through a Ponzi scheme. [Reuters]