Having balanced views in the standard-setting process, ensuring that there is no undue influence from any one stakeholder group and establishing a robust governance structure in the IASB is a key issue to ensure effectiveness and independence.
Over 60 leaders of the accountancy profession who attended the International Federation of Accountants' (IFAC's) G20 Accountancy Summit on July 23 and 24 in London unanimously agreed that the public interest would best be served by a single set of high-quality, principles-based financial reporting and auditing standards for listed and public Interest entities.
"It is critical that national standard-setting bodies establish roadmaps to move toward adoption of International Financial Reporting Standards and International Standards on Auditing,” emphasized Robert Bunting, IFAC President.
The group stressed the importance of having balanced views in the standard-setting process and ensuring that there is no undue influence from any one stakeholder group. They also emphasized the need for the International Accounting Standards Board to have a robust governance structure that will ensure its effectiveness and independence.
Other key recommendations from the group included the following:
· The needs of small and medium enterprises (SMEs) need to be considered in the development of standards, as well as in any re-regulation.
· The
G20 should continue to make strengthening corporate governance a priority. Focus should be placed on examining the role of independent directors, CFOs and audit committees, as well as improving the linkage of remuneration schemes with performance.
· There is a need for a more robust financial reporting model that includes, among other things, reporting on sustainability and environmental issues.
These and other recommendations from the summit participants, who represented accountancy organizations in 17 of the
G20 countries, will be included in a communiqué sent to the
G20 within the next two weeks.
© IFAC - International Federation of Accountants
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