Financial Accounting Standards Board Chairman Robert Herz envisions a day when FASB will become part of the International Accounting Standards Board, but there are some hurdles to overcome first.
Speaking at the IFAC World Accountancy Forum during World Accountancy Week, he said it "would be a single organization. It would be called the International Accounting Standards Board and it would have an office in the U.S., maybe in Norwalk, Conn.," where FASB is based. He added that the organization would also have branches in other countries such as China.
FASB has not only been meeting to discuss accounting convergence with the IASB, but also has been having separate bilateral meetings with regulators in China, Japan and other countries, according to Herz, but he acknowledged that there are national pride issues to overcome, as well as political barriers. "My well-crafted standard should not give way to a public policy goal of a politician seeking re-election," he said.
He believes the IASB needs to continue to work on improving the funding mechanism that supports the organization and noted that the IASB does not have the political standing of organizations like FASB, which has been funded by mandatory contributions since the passage of the Sarbanes-Oxley Act.
Mark W. Olson, chairman of the Public Company Accounting Oversight Board, described how auditing standards were also converging internationally. "The markets have been pushing for convergence of accounting standards rather than auditing standards," he noted.
He said there were fewer obstacles for auditing convergence. The main thing auditors needed to do was make sure that companies were relying and adhering to the relevant accounting standards. The PCAOB has been moving to accept the work of non-U.S. firms and oversight bodies more. But Olson insisted that the PCAOB had to maintain a role independent of the accounting and auditing professions. "The PCAOB is there in support of the shareholder," he said.
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