INTERNATIONAL ACCOUNTING STANDARDS: THE QUESTION IS NOT IF, BUT HOW

This month's Millennium Series article addresses the finalization of the restructuring of the International Accounting Standards Committee. The various regulatory agencies and accounting organizations with a strong interest in the issue have always been unanimous in their agreement that international accounting standards--for cross-border financial reporting as well as market trading--are essential. They have not always agreed on the appropriate structure for the body responsible for setting those standards. Should the "board" be accountable to a political body, should the members be voluntary or paid, should the members
represent geographic regions?

Unsurprisingly, the structural issues have been difficult because of the cultural differences of the parties involved. Finding common ground has required a long road of forums, studies, recommendations, and reports, with reviews and revisions at every step.

The major structural overhaul begun in 1998 is finally in a form acceptable to most. Some parties, however, feel the solution has too much of an American flavor. The new structure very much resembles FASB, and SEC Chair Arthur Levitt will head the nominating committee to pick its first board of trustees. *

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