There is always a balance to be sought between the flexibility of informal arrangements and the greater complexity of more structured systems. And as the IASB has grown in stature and influence it has become more obvious that the balance needs to be recalibrated. The IASB Chairman, Hans Hoogervorst, has made this clear in recent months and now Michel Prada, Chairman of the IASB’s parent body, the IFRS Foundation, has emphasised the point.

It is an inevitable result of steady change not just in the IASB itself but also in the environment which it serves. In Prada’s view, as he made clear at the recent conference of IOSCO, the organisation of national regulators, in Tokyo, there needs to be change in how the IASB creates standards and also in how the consistency in their implementation can be improved.

The IASB, he said, ‘cannot do this alone’. ‘It must find ways to work in close cooperation with standard-setting bodies around the world, to tap into the best thinking in financial reporting, but also to make sure that jurisdictional requirements are fully taken into consideration’. The growth of the IASB has been reflected, particularly in recent years, by the growth in regional bodies seeking to influence or put across their own particular points of view. Meanwhile national standard-setters maintain their own voices. All of these many voices need to be heard and their needs satisfied.

Much of this is simply a reflection of the success of the IASB. As Prada pointed out two-thirds of countries in the G20 are required to use IFRSs and almost half of the Global Fortune 500 Companies now report using IFRSs. It is this scale of use of IFRS around the world which demands a more formal structure to ensure that, as far as is possible, everyone feels they have a stake in the system. ‘The IASB has been given the responsibility to develop international standards’, said Prada, ‘but it does not have the authority to say how those standards should be endorsed, implemented or enforced. Neither is it equipped to easily identify the consequences of the standards without the contribution of those entities that implement them in the field’.

So a more formal process should help to create greater buy-in and, most usefully, ensure that the practical issues of implementation are dealt with at an early stage. The IASB needs to avoid the present system where, all too often, outreach and field testing is done late in the process of producing a standard and the inevitable delay starts, perhaps, to endanger the success of any subsequent endorsement. Under a more formalised relationship the relevant outreach, for example, could be instigated earlier and the work done in a more collaborative way.

Flexibility is fine when the number of participants is low and their interests are close. Now that the world of IFRS has grown well beyond critical mass the participants need certainty in the ways in which they work with the IASB.

All this is a consequence of the complexity of maintaining a consistent global system. It is not unique to the accounting world. All truly global bodies, the IMF or the World Bank for example, strive for consistency of approach.

It does mean that the world of the IASB will steadily become more political and more difficult as it strives to satisfy all its constituents that it is taking their concerns on board and producing solutions which will keep them happy. But hopefully it will be more about collaboration and shared endeavour than turf battles.