Michel Prada opens the autumn 2015 IFASS meeting

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29 Sep 2015

Directly after the 2015 Word Standard-setters (WSS) meeting, the national standard-setters convened at the autumn 2015 International Forum of Accounting Standard Setters (IFASS) meeting, also held in London. Michel Prada, Chairman of the Trustees of the IFRS Foundation, delivered the opening remarks.

Mr Prada first briefly spoke on the main strategic challenges, including the status of global progress towards IFRS. He stressed that the increasing adoption of IFRSs around the world also showed that IFRS raise the quality and consistency of financial reporting and bring benefits to companies and investors and that jurisdictions are aware of that. Mr Prada also mentioned that the fact that IFRS has been adopted by so many jurisdictions around the world means that the IFRS Foundation can shift the focus from getting jurisdictions to adopt to allocating more time to supporting the needs of existing IFRS jurisdictions, as well as supporting those jurisdictions who have already made substantial progress towards the use of IFRS for domestic purposes, such as Japan, India and China. He added that this does not mean that the IFRS Foundation will ignore other jurisdictions, such as the United States, that have not yet adopted IFRSs. He expressed hopes that convergence will continue.

Secondly, Mr Prada spoke on the current consultation on the structure and effectiveness of the IFRS Foundation. He reminded the standard-setters in the room that this review provides a platform for them to tell the IFRS Foundation what it does well and where there is room for improvement. He encouraged feedback on how the IFRS Foundation can ensure that the relevance of IFRS is maintained, what more can be done to encourage consistency in the application of IFRS, and what more can the IFRS Foundation do to further strengthen the governance, accountability and financing of the IFRS Foundation.

Finally, given the audience he was addressing, Mr Prada discussed the role and responsibilities of accounting standard-setters in an IFRS world. He pointed at the IASB's WSS meeting just held before the IFASS meeting and the ASAF meeting that will directly follow. He asked whether having these bodies in place was sufficient. Mr Prada also asked whether the IASB should get more involved in bodies such as IFASS, which is a body instituted by the national standard-setters where the IASB is just one guest among many, or whether it is good that national-standard-setters have a body to themselves. Mr Prada also mentioned that expectations with all bodies and the IFRS Foundation and the IASB always go two ways and that in a world where all involved parties agree that the goal is having one set of high quality global accounting standards they have to leverage resources and networks, particularly in the area of policy-level outreach and stakeholder engagement.

After his remarks Mr Prada took questions from the audience on all aspects of his speech. One of them concerned the perceived fact that the IASB favours coopoeration with the FASB over working with other standard-setters, which would be giving undue influence to the FASB. In his reply, Mr Prada again spoke out fervently for supporting the goal of global accounting standards. He stated that if a standard-setter has knowledge the IASB can draw on, the IASB should not turn it down - and the FASB was a very experienced standard-setter. Yet he also pointed at the fact that the IASB works with many other standard-setters on individual projects. Mr Prada also denied that this cooperation means that the IASB is unduly influenced by these standard-setters. For, as he pointed out, if the FASB really influenced the IASB unduly, IFRSs would be much more rule based while in fact there are now FASB standards (for example on revenue recognition) that are in fact principles based.

Please click to access the full text of the speech on the IASB website.

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