IASB chairman testifies before US Senate committee

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10 Sep 2004

In testimony yesterday in Washington before the US Senate Committee on Banking, Housing and Urban Affairs, IASB Chairman Sir David Tweedie provided the committee with an update on the work of the IASB and on efforts toward convergence of IFRSs with FASB standards since his last testimony before the committee in February 2002. An excerpt: The effective functioning of capital markets is essential to our economic well-being.

In my view, a sound financial reporting infrastructure must be built on four pillars: (1) accounting standards that are consistent, comprehensive, and based on clear principles to enable financial reports to reflect underlying economic reality; (2) effective corporate governance practices, including a requirement for strong internal controls, that implement the accounting standards; (3) auditing practices that give confidence to the outside world that an entity is faithfully reflecting its economic performance and financial position; and (4) an enforcement or oversight mechanism that ensures that the principles as laid out by the accounting and auditing standards are followed. The Sarbanes-Oxley Act refocused attention on these pillars and provided many useful approaches to improve the financial reporting environment. Click to Download the Text of Sir David's testimony (PDF 38k).

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