The European Union could decide to cut the International Accounting Standards Boards funding unless the board makes changes in its governance.
E.U. internal market commissioner Michel Barnier made the threat at a meeting of accountants and regulators in London, according to the Financial Times. He wants to see more representatives from banks, companies and regulators on the IASBs governing board. The move could imperil the independence of the IASB, but also make it more accountable to some of the constituents it has said it is listening to.
The IASB, like its counterpart in the U.S, the Financial Accounting Standards Board, have been dealing with pressure in the past year from politicians and bankers to revise accounting standards, particularly in the area of fair value measurement and mark-to-market. The SEC has said it also wants to see changes in the governance of the IASB before it will approve the roadmap to International Financial Reporting Standards.
Pressure on both sides of the Atlantic could cause the board to make changes more quickly, especially if the E.U. decides to withhold funding, or declines future funding increases.