2011

Press Release


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Contact(s):

Mitchell Slepian
212-596-6177
mslepian@aicpa.org

AICPA Comment Letter to the International Financial Reporting Standards Foundation's Monitoring Board 

Published April 01, 2011

Today, the American Institute of Certified Public Accountants sent a comment letter to the International Financial Reporting Standards Foundation’s Monitoring Board regarding its Feb. 7, “Consultative Report on the Review of the IFRS’ Governance.”

The Institute generally supports the report. However, it made the below commentary, urging the SEC to continue its efforts to find a way to help fund the IASB and asking the monitoring board to be mindful of the need for independence of the IASB in both fact and appearance.

Do you have concrete suggestions on how the Monitoring Board or the Trustees could encourage a move towards a more stable and independent funding model?

We understand that the U.S. SEC will continue to study potential contribution mechanisms from the U.S.  We believe that the SEC should budget funds for the support of the IASB Foundation.  We believe any solution by the SEC would go a long way towards achieving a stable funding mechanism.

Do you believe that the Monitoring Board should have a more prominent role in the selection of the IASB Chair? Do you agree with the proposal that the role include involvement in establishing a set of publicly disclosed criteria for the Chair, and assessment of a short list of candidates against those criteria? Please provide reasons.

No, we do not believe that the Monitoring Board should have a more prominent role in the selection of the IASB Chair, as such a more prominent role could be seen as impairing the IASB’s independence.

Do you believe that the Monitoring Board should be given any further, specific role in the selection of the IASB Chair? In particular, should the Monitoring Board approve the Trustees’ final selection? Please provide reasons.

No, we do not believe the Monitoring Board should have any further, specific role in the selection of the IASB Chair, as we believe any such role could be seen as impairing the IASB’s independence.

Dan Noll, CPA, AICPA director of Accounting Standards further commented on these items at the March 28 IFRS Monitoring Board roundtable at Stanford University.

Noll stated, “Many of us here would agree on the critical importance of a stable and independent funding model for the IASB. We understand that the SEC will continue to study potential contribution mechanisms from the U.S.  We strongly urge the SEC to expedite their efforts.  We believe that any funding solution on the part of the SEC would go a long way towards solving this problem.”

He also commented, “We believe the Trustee selection process, with the added review by the monitoring board is appropriate.  However, we believe that the IFRS Trustees must take care to ensure it has an appropriate representation from small and medium sized entities, especially as more nations adopt the IFRS for SMEs standard.”

The Monitoring Board is responsible for ensuring that the IFRS Foundation Trustees continue to discharge their duties as defined by the IFRS Foundation Constitution, as well as approving the appointment or reappointment of Trustees. The IFRS Foundation is an independent, not-for-profit private sector organization working in the public interest to develop a single set of high quality, understandable, enforceable and globally accepted international financial reporting standards through its standard-setting body, the IASB, to promote the use and rigorous application of those standards, to take account of the financial reporting needs of emerging economies and small and medium-sized entities  and to bring about convergence of national accounting standards and IFRSs to high quality solutions.  The governance and oversight of the activities undertaken by the IFRS Foundation and its standard-setting body rests with its Trustees, who are also responsible for safeguarding the independence of the IASB and ensuring the financing of the organization. The Trustees are publicly accountable to a Monitoring Board of public authorities.

A copy of the letter is posted at IFRS Monitoring Board Comment Letter.  If you would like to talk to Dan Noll, please contact Mitchell Slepian, AICPA, manager media relations, 212.596.6177 or mslepian@aicpa.org.

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