The
Big Four support the IASB establishment of the Accounting Standards Advisory
Forum to help increase dialogue with the national standard setters, but seek a
number of clarifications around the organizational and operational aspects of
the proposed Forum. For example, in its letter, Ernst & Young expressed concerns
about the frequency of membership review.
The
IASB said that membership on the Forum will be reviewed every two years.
Although agreeing that there should be a review of the membership, E&Y is
concerned that this period may be too short to allow members to contribute
meaningfully and to develop continuity in membership for the Forum to be
effective. The goal should be to refresh the Forum from time to time, but to
retain some continuity to gain the maximum benefit from discussion with the
standard setters.
E&Y
would also like clarity on the purpose of the ASAF and the role it is meant to
play in the standard setting process. The IASB indicates that the purpose is to
have detailed technical discussions on current topics, noted the firm, but it
is unclear what this would mean in practice. The interaction between the IASB, the
Forum and national standard setters that are involved in a specific project
should also be clarified. This would also include addressing the process of how
a national standard setter is selected to assist in a specific project.
The
firm also advised that, in setting the agenda for the ASAF, the IASB must avoid
the appearance that there is undue influence on the IASB agenda. The IFRS
Foundation should avoid situations in which the papers being discussed by the
ASAF mirror too closely to the papers that are discussed by the IASB during
deliberations at a subsequent meeting as this could be viewed as
pre-determining the IASB discussions.
In
its letter, KPMG strongly agreed that the ASAF should be an advisory body only
and therefore would not have any decision-making authority. KPMG expects,
however, that the views presented in the ASAF to be carefully considered by the
IASB, and for the Board to provide progress reports as to how issues discussed
with ASAF have been ultimately decided.
Deloitte
& Touche views the Forum as assisting the IASB to accomplish two distinct
but related aims: the development of high-quality financial reporting
standards; and assist in facilitating the incorporation and endorsement of such
standards without modification in the financial reporting framework of
individual jurisdictions. Given this
view, Deloitte thinks it important to establish a clear objective for the
Forum, one that identifies clearly the two aims and how they relate to the
IFRS.
It
is desirable to engage a network of national standard-setters, regional groups
of standard-setters and bodies involved with standard-setting from those
jurisdictions that have incorporated IFRS into their financial reporting
framework, and those considering such an action. The Forum should support the maintenance and
better use of technical resources around the world and assist in the
development of high-quality financial reporting standards and the promotion of
IFRS in a sustainable manner.
In
its letter, PricewaterhouseCoopers said that national standards setters have
wide-ranging engagement with other stakeholders in the jurisdictions in which
they operate, and hence have valuable insights that they can contribute to the
IASB. The firm supports bilateral relationships with national standard setters.
As more jurisdictions move to adopt IFRS, it will be increasingly important to
find a practical and manageable means of harnessing the input that these bodies
can provide. At the same time, PwC believes that the IASB and its stakeholders
should be realistic about what the proposed Forum can achieve.