Hoogervorst and Prada Make the Case for IFRS

The chairmen of the two organizations responsible for the creation of International Financial Reporting Standards argue the value of the standards to the public in a new publication.

In Working in the Public Interest: The IFRS Foundation and the IASB, International Accounting Standards Board Chairman Hans Hoogervorst and IFRS Foundation Chairman Michel Prada aim to make the case IFRS, and to debunk what they see as some myths about it, including the notion that the standards are tilted towards fair value, and that privileges commercial interests or certain types of investors or investment activities.

Hoogervorst and Prada start by explaining that the audience for IFRS is investors, along with the regulatory community, then move on to explain the characteristics of IFRS and how accounting standards attempt to represent economic reality, and then describe their organization’s three-tier structure, governance and funding, with an emphasis on its accountability and independence

“High-quality accounting standards keep capitalism honest and contribute to trust in the economy,” Hoogervorst said in a statement on the release of the publication. “As most citizens are investors either directly or indirectly, financial reporting is important to them because it is a pre-requisite for well-functioning capital markets.”

The publication is available on the Web site of the IFRS Foundation and the IASB.