IOSCO letter to G20 Heads of State
13 Nov 2008
The International Organization of Securities Commissions (IOSCO) has sent a letter to the G20 Heads of State as input to their upcoming discussions in Washington on 15 November.
The letter reviews IOSCO's work toward high quality global securities regulation, noting that one of the four main areas in which IOSCO has focussed its work is 'international financial reporting standards and the accountability of the standard setter to the community of national authorities responsible for reporting by public companies'. Attached to the letter is a Statement by IOSCO Regarding Accounting Standards and Governance. Click to download IOSCO's letter to the G20 (PDF 98k). Below is an excerpt from the statement on accounting standards.
IOSCO also supports the development and use of robust, internationally accepted, and consistently applied financial reporting standards. To achieve such standards, the standard setting process must be accountable and subject to appropriate consultation. In this regard, IOSCO strongly supports International Financial Reporting Standards (IFRS) as developed by the International Accounting Standards Board (IASB).
The job of developing and maintaining high quality standards that provide transparency to investors relies to a critical extent on independent accounting standards setters, including the IASB. Standard setters will be best able to produce high quality standards if they are able to exercise independent judgment, relying on their skills, experience and due process, without undue political pressure and taking into account the views of all stakeholders. In this light, IOSCO stands ready as a community of capital market authorities to support accounting standards setters in their roles.
At the same time, IOSCO members are those with direct responsibility for protecting investors in our markets. To fulfill this duty, IOSCO members must have a means of ensuring that accounting standard setters are working in the best interests of investors. IFRS is being used in more and more jurisdictions around the world. It is critical for securities regulators that allow or require the use of IFRS in their jurisdictions (or are considering doing so) to maintain a balance between protecting the independence and integrity of the IASB as the standard setter for IFRS, while ensuring that the IASB is accountable for producing standards in the best interests of investors.