A new board that includes the Securities and Exchange Commission and other regulatory bodies will now oversee the trustees who oversee the International Accounting Standards Board.
The Trustees of the International Accounting Standards Committee, the oversight body of the IASB, announced the change to its constitution on Thursday. The monitoring board will make the international standard-setter more accountable to government regulators, but the IASB will still maintain autonomy.
The monitoring board includes representatives from the SEC, the European Commission, the Japan Financial Services Agency, and the Emerging Markets and Technical Committees of the International Organization of Securities Commission. The Basel Committee on Banking Supervision will sit as a formal observer at monitoring board meetings.
The IASB has been under pressure to become more accountable to government regulators, as the Financial Accounting Standards Board is to the SEC in the U.S., but that has sometimes backfired. Last year, IASB Chairman Sir David Tweedie came close to resigning after the European Commission pressured him to amend accounting standards for banks (see Pressured IASB Chairman Considered Resigning). Some members of Congress and banking groups have also demanded that the SEC overrule FASB on fair value and mark-to-market accounting standards, although the SEC recently published a study that largely defended the standards but left room for improving them.
The IASC trustees also announced that they were expanding the size of the IASB from 14 board members to 16 by 2012, with criteria added to ensure geographic diversity. In contrast, FASB reduced the size of its board from seven to five last year.
The new members of the IASB will include four from the Asia/Oceania region, four from Europe, four from North America, one from Africa, one from South America, and two from any area, subject to maintaining overall geographical balance.
“The trustees have responded positively on the questions of public accountability and IASB membership,” said IASC chairman Gerrit Zalm (pictured), a former deputy prime minister and finance minister of the Netherlands. “We recognize the need for change in the emerging global framework of standard-setting.”
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access