The IPSASB Governance Review Group consists of members from the International Monetary Fund (IMF), Organization for Economic Cooperation and Development (OECD), the World Bank, Financial Stability Board (FSB), the International Organization of Securities Commissions (IOSCO) and the International Organization of Supreme Audit Institutions (INTOSAI).

The Review Group's consultation paper responds to concerns that the existing governance arrangements of the IPSASB are not subject to a formal public interest oversight mechanism, outlining a number of possible options for strengthening the IPSASB's governance arrangements:

• Option 1 - extending the scope of the IFRS Foundation Monitoring Board and Trustees activities
• Option 2 - establishing separate monitoring and oversight bodies for the IPSASB while it remains under the auspices of the IFAC
• Option 3 - re-establishing the IPSASB outside of IFAC with its own monitoring and oversight bodies.

The IPSASB's response to the consultation paper, in unanimously supporting Option 2, sets out the IPSASB's view that "this alternative meets all of the characteristics for strong public interest oversight... accountability, independence, competence and credibility" and that it is "a practical and timely solution".

In addressing concerns outlined in the consultation paper that retaining IPSASB under the auspices of IFAC results in perceived conflicts of interest, the IPSASB response notes the following:

The factual experience of the IPSASB has been that there has never been any interference by IFAC with respect to the IPSASB’s independence or any interactions that have been negative in any way. We have found that in many respects IFAC’s involvement is in fact a strength - because the participation of the accountancy profession adds an element of independence from the principal users of our standards, governments and international organizations. This is unlike other IFAC standard-setting boards which are setting standards for IFAC member body members themselves.

In addressing the structure and mandate of an oversight body under its preferred option, the IPSASB notes its view that the monitoring and oversight function could be merged and carried out by a single body. In the IPSASB's view, membership of the body would not require technical expertise, but members "should be enthusiastic about the need for public interest oversight... and have strong support for fiscal transparency". IPSASB's proposed role for the oversight body would include an ability to approve or comment on the IPSASB's strategic and work programmes. In addition, the IPSASB supports the creation of a Consultative Advisory Group (CAG), whose roles would include providing advice on the IPSASB's agenda and project timetable (including priorities) and the provision of technical advice on projects.

The IPSASB's response outlines a number of reasons as to why the IPSASB does not believe that extending the scope of the IFRS Foundation Monitoring Board and Trustees activities to encompass public sector accounting standard setting is appropriate, including:

• Considerable questions as to whether the IFRS Foundation would be willing to take on IPSASB oversight and commit appropriate resources
• A lack of clarity about how the oversight of the IPSASB would be integrated into the IFRS Foundation's oversight framework, and the impacts on the structures and processes of the IPSASB and International Accounting Standards Board (IASB)
• Some criticism that International Public Sector Accounting Standards (IPSASs) are already "too close" to International Financial Reporting Standards (IFRS). The IPSASB comment that the Eurostat report on the suitability of IPSASs for EU Member States highlight this criticism of the IPSASB and that bringing IPSASB under the oversight of the IFRS Trustees would "reinforce that criticism".

In terms of the third option of re-establishing the IPSASB outside of IFAC, the IPSASB believes there is insufficient detail in the consultation paper to enable debate about whether this is a realistic option and that it "raises significantly more issues".

Click for the full IPSASB consultation response (link to IFAC website).

The homepage of the Research Centre encourages interaction through four main sections:

• How you can help contains descriptions of the research issues on which the IASB will be working in the next two to three years and where the IASB is seeking input from the broader research community.
• Get started lists topics and issues that could be of interest to the academic community and includes links to papers written by IASB staff.
• Get involved provides information about ways to get involved with the research work of the IASB, including the possibility of joining the organisation through its Academic Fellowship programme.
• Stay informed gives access to the IFRS Research Round-up. A first issue of the newsletter has been published together with the launch of the Research Centre.

Please click for access to the press release on the IASB website announcing the launch of the centre.

The bulletin considers (1) issues of complexity in financial statements, (2) possible causes, and (3) provides suggestions to the conceptual framework that may reduce the complexity.

FEE agrees with the definition of complexity in the bulletin and also believes that there is a direct relationship between complexity, the costs to preparers and the benefits to users of financial statements. FEE also agrees that the standard-setting process could - to some extent - add to complexity. However, FEE does not support the statement that the standard-setting process contributes to the "avoidable" part of complexity whilst only the complex business environment leads to "unavoidable" complexity:

FEE considers that attempting to distinguish avoidable and unavoidable complexity is a judgmental exercise and we question whether this is necessary in order to address the issue.

FEE therefore comes to the conclusion that complexity should not be considered as a primary factor in standard-setting. Instead, FEE believes that assessing whether undue complexity was introduced in a standard should be considered as part of the field testing and the costs and benefits analysis of a standard.

Please click to access the full comment letter on the FEE website.

So far, only three of the five points in the ED have been redeliberated:

• Adjusting the unearned profit from insurance contracts.
• Presentation of insurance contract revenue and expenses.
• Presentation of interest expense between profit or loss and the other comprehensive income.

The staff paper is available on the IASB's website.

In his speech, Mr Prada discussed the globalisation of IFRS; he promoted the IASB's heavily-researched jurisdiction profiles and provided insight into the transition to IFRS for several large economies such as Japan and the United States.

Mr Prada expressed his optimism for the eventual globalisation of IFRS, noting that "IFRS has only recently reached its teenage years." He pointed to the benefits of a single set of global accounting standards:

[F]undamentally it is a question of economics rather than accounting. The thing to remember is that differences in accounting standards add no economic value or benefit to anyone, unless you are involved in the business of reconciliation. . . . [E]xperience has shown that far from being a tool of national competitive advantage, different accounting requirements only serve to diminish the attractiveness of a jurisdiction in the global market for capital. . . . [A]ccounting standards are best thought of as a global good, not as a tool for national competitive advantage. They play an essential supporting role, facilitating growth and promoting a sustainable and prosperous global economy.

Mr Prada also discussed the areas of focus for the IFRS Foundation Trustees' third constitution review: (1) discussing the optimum size of the IASB, (2) reviewing the Accounting Standards Advisory Forum (ASAF), and (3) seeking feedback on further enhancements to the activities of the IFRS Foundation.

A transcript of Mr Prada's keynote speech is available on the IASB website. The stakeholder event also included an interactive panel discussion with senior financial reporting stakeholders. See our previous story on the panel discussion of complexity.