IFAC believes that the global public interest is best served by consistent global adoption and implementation of high-quality, internationally accepted financial reporting, auditing, assurance, public sector accounting, accounting education, and ethics standards (including independence requirements for auditors), and by use of these standards for reporting financial information for capital and debt markets.
The Policy Paper lists six benefits of global convergence:
- improved comparability of financial information,
- reduced effects of systematic risks,
- reduced information costs,
- less opportunities for regulatory arbitrage,
- basis for a global regulatory system,
- additional benefits for developing and emerging countries.
However, the paper also lists challenges and impediments. While acknowledging that countries are different, IFAC warns that adding additional requirements or implementing "carve outs" on a national level undermines global convergence. IFAC fears for a continued momentum to seek global outcomes if putting national interests before global solutions becomes a tendency. The paper states:
Progress toward global solutions risks being derailed: (i) by inconsistent and/or unilateral decision making, including reforms that have extra-territorial impacts; and (ii) by politicians taking a national - rather than global - view of critical economic issues.
The new Policy Position Paper is available through the corresponding press release on the IFAC website.