After a review of the structure and effectiveness of the IFRS Foundation, which oversees the International Accounting Standards Board, its trustees have suggested a number of amendments to its constitution.
The proposed amendments fall under three broad categories. First, the trustees aim to “further enhance governance and funding arrangements” of the foundation by:
- Reducing the size of the board from 16 to 13 members, with an option to appoint a 14th member;
- Combining the North American and South American allocations for both the board and the trustees into a single Americas category;
- Improving the visibility of trustee oversight of the IASB, including by making meetings of the Due Process Oversight Committee public; and,
- Maintaining the current “three-pillar” funding model until the planned funding regime based on publicly supported financing is fully achieved.
Second, to “strengthen the relevance of IFRS standards,” the trustees propose accelerating work to address barriers to high-quality digital reporting by collaborating with investors, securities regulators and others to ensure the IFRS Taxonomy remains fit for purpose, while also establishing a network of experts to provide advice on technological innovation and its impact and relevance to IFRS Standards.
And third, “to support consistent application of IFRS standards,” they propose:
- Placing an increased emphasis on activities to support the consistent application of IFRS standards, including the realignment of education, implementation support and interpretation activities into a single team;
- Continuing to develop additional resources and materials to assist the consistent implementation of major new standards, including the provision of online resources; and,
- Continuing to develop relationships with securities regulators (for example, IOSCO, through the recently updated joint Statement of Protocols) and others to support implementation of IFRS Standards around the world.
“This latest trustee review has provided a good opportunity to ensure that we are continually refining and evolving the work of the organisation,” Michel Prada, the chair of the trustees, said in a statement. “The changes announced today enhance the institutional underpinnings of the IFRS Foundation and equip it to further develop its capability as the world’s accounting standard-setter.”
An exposure draft of the proposed amendments is available on the IFRS Web site; comments are due by Sept. 15, 2016.
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