As the incoming chairman of the International Accounting Standards Board, Hans Hoogervorst has been named to a key position in the global accounting profession at a time of dramatic changes.
Hoogervorst will be taking over from Sir David Tweedie, who has chaired the IASB for 10 years and will be retiring when his term expires next June (see Hoogervorst Named as Next IASB Chairman). Tweedie has made it his mission to spread International Financial Reporting Standards across the globe, with the major holdout being the United States. The U.S. has so far resisted adopting IFRS, but instead has taken the approach of slowly converging IFRS with U.S. GAAP.
Under the current timeline, convergence is supposed to be largely accomplished by the end of next year, and the Securities and Exchange Commission will make a decision next June on whether the process is sufficiently advanced to allow IFRS to be incorporated into the U.S. financial reporting system. But with Tweedie on the way out, and former FASB chairman Bob Herz now retired, the convergence process is somewhat in doubt.
Still, Europe has largely adopted IFRS, albeit with some reservations and carve-outs. But the process hasnt always gone so smoothly and Tweedie, a Scotsman, has found himself tangling with government officials in France, Germany as well as the European Commission over various standards that have provoked the ire of bankers and other industry representatives. Hoogervorst will be bringing more of a government mentality to the IASB, having previously served as the minister of finance in the Netherlands, as well as minister of health, welfare and sport, and state secretary for social affairs.
Unlike Tweedie, he is not an accountant, but he has been involved with accounting standard-setters in recent years, having worked as chairman of the Netherlands Authority for the Financial Markets, chairman of IOSCOs Technical Committee, and co-chair of the Financial Crisis Advisory Group, which has been advising accounting standard-setters on how to respond to the global financial crisis. Hoogervorst was also picked last year to chair the Monitoring Board that is supposed to oversee the IASB and provide it with input and backing from government regulators.
His background in the government regulatory environment could prepare him well for dealing with the inevitable government interference with the accounting standard-setting process. Hoogervorst has been praised for defending the independence of the standard setters, but knowing his way around the bureaucracy of at least one European government should be a big plus.
He will be aided by Ian Mackintosh, who has been named vice chairman of the IASB and who currently chairs the U.K. Accounting Standards Board. Mackintosh had been considered a front-runner for Tweedies job, but apparently the idea of naming two IASB chairmen in a row from the U.K. proved to be too much to stomach for those constituents who dont happen to hail from Britain. Mackintosh is originally from New Zealand, which may have helped bolster his case, plus hes an accountant, having worked in Australia for Coopers & Lybrand and later as a consultant in his own practice.
Teamed with Hoogervorst, they will have a full agenda as they try to make sure the U.S. and the rest of the world dont give up on IFRS or convergence, while also doing more outreach to Africa, Asia and Latin America to spread the gospel of global accounting standards.
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