Broad support among CFOs for global standards

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03 Dec 2008

The International Standards Project (a joint research project of Duke University, USA, and Oxford University, UK) has published 'Research Report Assessing the IASB', a survey of the views of 749 financial executives about IFRSs and the IASB.

Principal researchers are Professors Tim Buthe (Duke) and Walter Mattli (Oxford). The survey participants were mostly CFOs and chief accounting officers of companies listed on the major stock exchanges of the United States (NYSE), Germany (Frankfurt), France (Paris-Euronext), and the United Kingdom (London). Among the topics studied are:

  • costs-benefit assessment of IFRS
  • general desirability of the shift from domestic to international financial reporting standards
  • current strengths and weaknesses of IASB standard-setting
  • emerging issues, including the desirability of 'fair value' or 'mark-to-market' accounting rules.

Click to download the Report from IAS Plus (940kb), posted with the kind permission of Buthe and Mattli. For more information about the International Standards Project, see their website.

Assessing the IASB: Key Survey Findings
  • Financial executives overwhelmingly expect financial reporting standards to be increasingly set at the international level, and a clear majority of participants approves of this trend.
  • More than 1 in 3 nonetheless questions whether truly global accounting rules and practices are achievable given the differences in legal environments and business cultures across countries.
  • Large majorities of both US and European corporate finance executives see the IASB as moving toward full fair value accounting, but only few approve of this trend.
  • Americans assess key aspects of IASB standard-setting much more favourably than Europeans, including IASB due process, transparency, accessibility, inclusiveness, and accountability.
  • Clear majorities of both US and European financial executives believe that the quality and effectiveness of the IASB's International Financial Reporting Standards (IFRS) is high. At the same time, many also consider the complexity and cost of implementation of IFRS to be high or very high, and almost 60 percent respondents believe that the costs of switching to IFRS so far outweigh the benefits.
  • Listed companies that expect to be affected by a forthcoming IASB standard but nonetheless fail to communicate their views to the IASB often explain their inaction by saying they do not believe their comments would lead to any changes in the provisions of the draft standard.
  • US firms that do get involved in IASB standard-setting assess important methods or channels of involvement quite differently from their European counterparts. For example, 93 percent of American financial executives consider submitting comment letters effective; only 51 percent of Europeans consider them effective. Similarly diverging assessments apply to field tests and oral testimony at public hearings.
  • Overwhelming majorities say early involvement in the standard-setting process is key.

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