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IASB Chairman Hans Hoogervorst gave a speech at the Cass Business School in London, on the search for consistency in financial reporting standards. In his speech, he outlines five ways that the IASB is helping to promote a more consistent application of IFRS.
Hoogervorst first discussed the European adoption of IFRS — before which, it had been nearly impossible to compare financial statements across countries, competitors, and industries. Even though there are currently discrepancies among nations in the application of IFRSs, Hoogervorst said, "The truth is that even an unevenly applied global standard provides much more global comparability than an equally unevenly applied multitude of diverging national standards."
Hoogervorst also pointed out that it was not primarily the task of the IASB to manage the uniform application of its standards. Rather, this is the task of regulators and auditors. But he also admitted that the IASB could indeed contribute to a consistent application of IFRS. He outlined the following five areas that the IASB is taking the lead on:
- Developing principle-based standards that are capable of being applied, audited and enforced on an internationally consistent basis. Mr Hoogervorst cited deeper cooperation with organisations such as EFRAG and AOSSG, and the important role the proposed Accounting Standards Advisory Forum (ASAF) will have in 'road testing' new standards
- Completing a post implementation review of major standards and interpretations two years after they have come into effect, noting the post-implementation reviews of IFRS 8 and IFRS 3
- Extending the scope and responsibilities of the IFRS Interpretations Committee, which provides the IFRIC the tools it needs to react more quickly and effectively, avoiding discrepancies in practice
- Increasing production of educational material, with education material on IFRS 11 Joint Arrangements expected, following the initial material on IFRS 13 Fair Value Measurement which was released in December
- Expanding the cooperation with securities regulators at the international and regional levels, including "possibly through some form of MoU or other formal agreement".
Source: IAS Plus
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