AICPA HOPS ON FASB BANDWAGON FOR INTERNATIONAL STANDARDS SETTING REFORM

In a letter to Sir Bryan Carsberg, secretary-general of the International Accounting Standards Committee (IASC), the AICPA recently commented upon proposed changes to the structure of international accounting standards setting. The changes were proposed by a working party in response to criticism that the current IASC structure was subject to political pressures and inadequately funded, resulting in an uphill battle to produce high-quality accounting standards.

In commenting on behalf of the AICPA, Chair Olivia Kirtley and President Barry Melancon echoed FASB's observations (see News & Views, May 1999) by saying the recommended changes did not go far enough. The AICPA envisages a "single, independent, global standard setter with the requisite membership, authority, international standing, funding, staffing, and other sources needed to establish high-quality international accounting standards, based upon a sound conceptual framework and through a high level of
due process."

The standards setting board, in the AICPA's view, should be comprised of "highly skilled, experienced individuals with varied backgrounds including financial statement users, preparers, public accountants, academics, national standard setters, and regulators." The board would set its own agenda and its members would be sufficiently compensated to attract highly qualified individuals.

Under the AICPA vision, board members would be appointed by a board of trustees made up of individuals with varied backgrounds. There would be an adequate staff for handling a number of projects and providing in-depth research.

The AICPA acknowledged that it may not be possible to achieve its vision of the process at this time but encouraged the working party to consider the vision as the ultimate goal. In this the AICPA departs from FASB.

The May issue of Accountancy International, the magazine of the Institute of Chartered Accountants in England and Wales, reported that standards setters in the United Kingdom and Australia also have reservations about the proposed restructuring. Both bodies are fearful that the IASC Board's final approval authority over standards developed by the Standards Development Committee will seriously compromise the process.

Accountancy International also reported that the finance ministers of the European Union are expected to approve the restructuring proposals, with the result that a "war of GAAP" will erupt. In the meantime, the SEC's acceptance or rejection of the core standards already developed by the IASC becomes critical to the success of a universal set of international accounting standards. *

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