International Finance and Accounting Handbook

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board would work toward harmonization of any differences. AISG published a total
of 20 studies through 1977, when it was disbanded.


16.4 FORMATION OF THE IASC (1973). In 1972, at the 10th World Congress of
Accountants in Sydney, Sir Henry Benson of the United Kingdom put forward a pro-
posal for an International Accounting Standards Committee (IASC). Representatives
of the three AISG countries (Canada, the United Kingdom, and the United States)
discussed the proposal at the Congress. Shortly thereafter, the proposal was raised
with representatives of several other countries, including Australia, France, Germany,
Japan, the Netherlands, and Mexico. Together, the nine countries agreed to form the
IASC, and in 1973, the IASC opened its doors in London. Each of the countries had
a voting seat on the IASC board.
The IASC board was empowered to establish International Accounting Standards
(IASs). Each of the signatories to the agreement creating IASC agreed to use their
best efforts to bring about adoption of IASs as their national GAAP.


16.5 ACHIEVEMENTS OF THE IASC (1973–2000). Through expansion, by 2000, the
IASC’s original nine sponsoring bodies had grown to encompass 152 professional
accounting bodies in 112 countries—all of the members of the International Federa-
tion of Accountants (IFAC), which is the global association of national accounting
professional bodies. The IASC board that established International Accounting Stan-
dards eventually grew to have 16 seats—each represented normally by two individ-
uals plus a technical advisor. This meant that at least 48 people normally sat at the
IASC board table deliberating technical issues. Thirteen of the 16 seats were held by
individual countries or, in a few cases, pairs of countries. The other three seats were
held by a global financial analysts organization, a global financial executives organ-
ization, and a Swiss industry federation.


(a) Structure. In addition to the 16 board seats (48 persons in all), a number of
groups were represented around the board table as observers with the right of the
floor. They were the European Commission (generally two persons), the U.S. Finan-
cial Accounting Standards Board (FASB) (one person), the Ministry of Finance of the
People’s Republic of China (two persons), the Basel Committee (one or two persons),
and the International Organization of Securities Commissions (IOSCO) (up to five
persons). Including the IASC staff, it was not uncommon for upwards of 70 people
to be seated at the IASC board table.
A super-majority vote was required to publish an exposure draft (11 of the 16
IASC board members) and final Standard (12 of the 16).


(b) “Core Standards” and the “IOSCO Agreement.” As a private-sector, nongovern-
mental body, the IASC had no power to enforce its standards. And since it was a
global organization, it could not look to one national governmental agency to bring
about widespread adoption and enforcement of its standards. In this regard, IASC
differed from the FASB in the United States, whose standards are imposed on listed
companies by the Securities and Exchange Commission (SEC), and also differed
from the Accounting Standards Board in the United Kingdom, whose standards are
imposed on companies via legislation (the Companies Act).
The International Organization of Securities Commissions (IOSCO) is the repre-
sentative body of the world’s securities markets regulators, including the U.S. SEC


16 • 4 INTERNATIONAL FINANCIAL REPORTING STANDARDS
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