Chairman Michel Prada speech to IOSCO
24 May 2012
On 16 May 2012 Michel Prada, Chairman of the IFRS Foundation Trustees, addressed the 2012 IOSCO conference, in Beijing, China. In his speech, Mr Prada highlighted the IOSCO's role in developing IFRSs, discussed the future of the IASB as a global standard-setter, and shared his goal of greater coordination between the IASB and IOSCO.
Mr Prada began his speech congratulating the IOSCO on its governance reform, noting that the reform will enhance the IOSCOs visibility and efficiency. He spoke about the IOSCO being a catalyst for the the global accounting standards movement in May 2000, when it endorsed for cross-border listings. These were the 'core standards' of the Accounting Standards Committee, which later became the IASB.
In his speech, Mr Prada discussed the success of IFRSs and he is hopeful that the remaining countries, including the US, India and China, will come "fully on board" to see the full benefits of a single set of global accounting standards.
Mr Prada also spoke about the future role of the IASB as a global accounting standard-setter. He cited the reviews by the IFRS Foundation Monitoring Board and the IFRS Trustees which released jointly in February 2012. He believes that one of the most important findings in the Trustees' strategy review is the recommendation to "formalise the IASB's relationship with others involved in the financial reporting supply chain — accounting standard-setters, audit and securities regulators, and others. The purpose of this is twofold."
Mr. Prada goes on to explain:
The first relates to the IASB’s ability to create standards that can be applied around the world and without modification. The IASB 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 second purpose is to improve consistency in the implementation of those standards. The IASB has been given the responsibility to develop international standards, 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.
Mr. Prada then asked for more cooperation and collaboration between the IOSCO and the IASB, noting that the Trustees' strategy review provided a framework for a better-developed relationship.