The International Accounting Standards Committee Foundation has written a letter to President Bush asking him and other world leaders to respect fair value accounting and the standards-setting process.
The letter was written in anticipation of the Group of 20 summit on Nov. 15 in Washington, D.C. Gerrit Zalm, chairman of the board of trustees of the IASC Foundation, wrote to Bush but asked the meeting secretariat to pass along his letter to the other world leaders at the summit as well. The IASC Foundation, the oversight body for the International Accounting Standards Board, is working with the U.S. Financial Accounting Standards Board on fair value accounting and other standards as U.S. generally accepted accounting principles converge with International Financial Reporting Standards.
Zalm (pictured) noted that the issues of accounting standards, the credit crisis and the governance of the IASB may be on the meeting's agenda, and he hopes to forestall any dictates that would force the IASB into reversing course on the guidance it has issued to date on fair value accounting.
"The trustees believe that any steps taken outside the well-established and supported standard-setting process to amend fair value accounting would further undermine already scarce confidence in financial markets," wrote Zalm. "Therefore, efforts to improve financial reporting should be led and completed expeditiously by the IASB in order to ensure a globally coordinated approach."
He noted that the IASB and FASB have established a high-level advisory group of experienced financial leaders that will consider how improvements in financial reporting can restore investor confidence.
"Underpinning the organization's approach is the view that accounting standards should be developed by an independent IASB that reaches conclusions following a transparent and open due process," he wrote. "An independent body of trustees, whose appointments are approved by publicly accountable authorities, should oversee the IASB."
Addressing criticisms about the IASB's lack of public accountability, Zalm referred to plans by the trustees to establish ties to a monitoring board that will include "public authorities" responsible for adopting accounting standards. Details about the monitoring board will be announced in the coming weeks.
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