From my vantage point on the other side of the Atlantic, I was delighted to see the Securities and Exchange Commission publish its roadmap to adoption of International Financial Reporting Standards. I just hope the U.S. constituents are as pleased as I am and that we can make some real progress towards global accounting standards.With that hope in my heart, I thought it would be worthwhile exploring what the situation might be post-IFRS-adoption for U.S. GAAP, for the Financial Accounting Standards Board and for the International Accounting Standards Board, drawing on my experience of what has happened in the U.K. and Europe.

U.S. GAAP

Adoption of IFRS does not sound the death knell for U.S. GAAP. In the European Union, the law only requires IFRS to be applied by listed companies that produce consolidated financial reports. In the U.K. we - the Accounting Standards Board - allow any other company to use IFRS if they wish, but the majority still use U.K. GAAP.

Four years after the implementation of IFRS, we are still in the process of deciding the best arrangements for companies - and other entities - that fall outside the EU legislation. The ASB is at present following a three-tier approach.

"Publicly accountable" companies should use IFRS; the smallest companies should continue to use our existing standard for small companies; and the middle tier (those not small, but not publicly accountable) could use the IFRS being drafted by the IASB for private entities. This is all subject to public debate and consultation.

The point is that decisions on the financial reporting of all but the listed groups have stayed with the U.K. standard-setter. We regard the ASB's role as setting U.K. GAAP.

It seems to me that similar decisions will need to be made in the U.S., and that there is an important and ongoing role for FASB in this regard. Depending on the decisions made, U.S. GAAP need not die with the adoption of IFRS. In any case, any adoption of IFRS is going to take many years, and FASB will be a prime player during the transitional period.

Further, FASB has a mandate for the not-for-profit sector. We are still trying to find a solution in the U.K. on how to deal with this sector, which is not covered by IFRS. One approach would be to set a standard specifically for the sector and, should that idea gain acceptance, it may be that several national standard-setters could look at drafting such a standard together.

Apart from the setting of compulsory standards, a national standard-setter can play a broader role in maintaining confidence in its country's capital markets. The ASB believes that codes of best practice set a gold standard and encourage preparers to improve financial reporting. We call them reporting statements and so far have published two: on management commentary and on disclosures for pension scheme reporting. FASB may wish to use such statements within U.S. GAAP.

FASB

As well as the ongoing responsibility for overseeing U.S. GAAP, there are other roles for FASB in the future.

My view is that national standard-setters have a continuing and leading part to play in influencing the setting of IFRS. They need to actively liaise and debate with the IASB. They should keep their constituents up to date with proposed changes - and with all sides of any argument over those changes.

As a central forum for national views, they are the best-placed aggregator and independent judge of opinions from preparers and users of accounts based in their countries. They can exert intellectual influence through thought leadership and as hubs of regional debate, and through their practical experience as interpreters and implementers of standards. Their ability to carry out research, to test theories or proposals on the market and to assist in articulating the impact of standards should be a highly useful contribution to international standard-setting. The IASB cannot work in isolation, and properly researched input from many nations in the world will be critical to the success of global accounting standards.

I do not think it would be desirable for the U.S. to be the dominant force in the IASB going forward. But it is obvious that it should be a major force and contributor. A continuing strong FASB would, in my view, be the best vehicle for the U.S. to contribute actively and effectively to the formulation of IFRS.

Through regional groupings and international bodies, such as the European Financial Reporting Advisory Group (and its collaborative Pro-Active Activities in Europe Group), the National Standards-Setters Group, the World Standard-Setters annual meeting and the International Public Sector Accounting Standards Board, standard-setters can both seek consensus and exert influence all the more effectively because they do it together.

Increasingly, the IASB is using these groups to help with its work. The National Standard-Setters Group, which I chair, comprises about 30 national bodies, and FASB is already a member. It concentrates on doing joint research on important accounting issues, but increasingly is being used by the IASB to help in a number of ways.

FASB should remain a prominent member of regional and international groups, and it seems sensible for it to take a leadership role in the Americas. So FASB's future role could include maintaining U.S. GAAP as necessary, representing its constituents on the international stage, remaining a thought leader and researcher, and exerting an important influence on the future of IFRS, both alone and with other countries.

The IASB

Europe adopted IFRS early, as did many other countries. Other major nations such as Japan, China, India, Brazil and Canada have announced their intention to move to adoption. This is an extraordinary success story for the IASB, an organization that was created in its current form only eight years ago. If the U.S. were also to decide to adopt IFRS, we would have true global standards.

Were that to be the case, it would be time for a fundamental review of the IASB's membership and governance. It will have a United Nations of users and each would want in some way to be involved and to have the ability to influence it. While the U.S. would be the largest user of the standards, there would be other big and rapidly growing players involved. Should membership of the board be on the basis of expertise, geography or some other measure? How can we ensure that everyone's voice is heard? If the standards truly are global and accepted by most nations in the world, how can we set up the governance of the organization so that political opinion (as demonstrated recently, for instance, through the G20) can be expressed in a timely and appropriate manner?

These big constitutional questions have begun to be tackled by the trustees of the IASC Foundation, under which the IASB operates. This process will continue to evolve over the next few years, in parallel with consideration - and I hope adoption - of the roadmap to IFRS in the U.S.

It is difficult to reach true consensus in the world, and running an international body of any sort has its challenges. But global standards are inconceivable without the U.S. on the team, and that means as a signed-up user of IFRS.

What is not to like about the prospect of being an influential player in the international movement, as well as continuing to fulfill an important role at home?

Ian Mackintosh is chairman of both the Accounting Standards Board in the U.K and the National Standard-Setters Group.

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