and about 100 similar organizations. High-quality financial information is vital to the
operation of an efficient capital market, and differences in the quality of the ac-
counting policies and their enforcement between countries leads to inefficiencies be-
tween markets. As regulators of capital markets, IOSCO members have a strong in-
terest in financial reporting that is relevant, reliable, complete, and transparent.
Starting in the early 1990s, IOSCO took an active role in encouraging and pro-
moting the improvement and quality of IAS. In 1985, IOSCO and the IASC agreed
to work on a program of “core standards” that could be used by publicly listed en-
terprises when offering securities in foreign jurisdictions. The program identified 40
topics that IOSCO felt had to be addressed in the core standards before IOSCO could
recommend International Accounting Standards to its member agencies.
In December 1998, the IASC completed the core set of Standards, and IOSCO im-
mediately began a review of those Standards. The IOSCO review culminated in May
2000 in a public recommendation from IOSCO that its members allow foreign secu-
rities issuers to use International Accounting Standards, rather than requiring the
member’s national GAAP, possibly supplemented by additional disclosures. The full
text of the IOSCO endorsement may be found on IOSCO’s Web site at
http://www.iosco.org/news/.
At about the same time both the Basel Committee of bank regulators and the G7
Finance Ministers similarly endorsed IAS. In its April 2000 Report to G7 Finance
Ministers and Central Bank Governors on International Accounting Standards, the
Basel Committee on Banking Supervision said: “The Committee expresses its sup-
port for the standards developed by the IASC. It will continue a close dialogue with
the IASC and the banking industry to monitor future developments with care.” The
G7 Finance Ministers themselves issued a public statement saying: “We call upon the
IASC to finalize by early 1999 a proposal for a full range of internationally agreed
accounting standards. IOSCO, IAIS, and the Basel Committee should complete a
timely review of these standards.”
(c) Growing Pressure for Global Standards in the Late 1990s. The economic crisis
that began in 1998 in certain Asian countries and spread to other regions of the world
showed the need for reliable and transparent accounting to support sound decision
making by investors, lenders, and regulatory authorities. Regulators and economic
authorities around the world recognized this need.
The World Bank pushed countries to adopt IASs or develop national standards
based on IASs. In some cases, they required IAS reporting as a condition for grant-
ing a loan. The U.S. Senate passed a resolution calling on the SEC to study the use
of IASs in the United States. The European Commission began to see a common set
of accounting standards as a critical pillar in building a single unified capital market
in Europe, and after studying whether to develop their own set of standards they con-
cluded that the better way to go would be to require European companies to use IASs.
The G7 Finance Ministers and Central Bank Governors also committed them-
selves to endeavor to ensure that private-sector institutions in their countries comply
with internationally agreed principles, standards, and codes of best practice. They
called on all countries that participate in global capital markets similarly to commit
to comply with these internationally agreed codes and standards.
(d) Adoption of IASs Around the World. The goal of a single set of International Ac-
counting Standards replacing national standards was lofty—and the creators of the
16.5 ACHIEVEMENTS OF THE IASC (1973–2000) 16 • 5