Reuters reports that "Bolkestein told the European Parliament's economic and monetary affairs committee the EU executive had now decided to use a legal act which was directly enforceable in the 15 member states rather a 'directive', something which would have needed years to be adopted by the Parliament and EU governments."

But unless investors trust this information, investor confidence dies. Liquidity disappears. Capital dries up. Fair and orderly markets cease to exist. As the volume of information increases exponentially, the quality of information for investors and the markets they comprise must be our signal concern. As more countries move to an equity culture, high quality financial information – safeguarded by a rigorous process of corporate oversight – becomes the currency that will drive a more interconnected and global marketplace.

But incentives that bring us a more global market also demand that every market promote the very highest standards at home - not just to compete, but to survive. Like never before, the effects of a company's behavior resonate not only nationally, but more likely, globally. If a country does not have a reputation for strong corporate governance practices, capital will flow elsewhere. If investors are not confident with the level of disclosure, capital will flow elsewhere. If a country opts for lax accounting and reporting standards, capital will flow elsewhere. All enterprises in that country - regardless of how steadfast a particular company's practices may be - suffer the consequences.

The IASC Board Statement comments on current projects in progress and sets out the old Board's views on other matters including the style of accounting standards, the need for a project on convergence of national GAAPs and IAS, fair value measurements, discussion of financial results, electronic financial reporting, public sector reporting, standards for small enterprises, and enforcement.

Number 2 in the "ten most critical financial reporting challenges facing US public companies for the year 2001" identified by the Financial Executives Institute: "International Accounting Standards -- Prepare for changes in domestic GAAP that will ensure compatibility among the accounting principles of countries around the world." FEI News Release (PDF 23k).

The study also includes a comparison with IASC standards.

Among other things, the Board expressed a hope that its successor would continue work on the projects on:

• business combinations,
• present value,
• reporting financial performance,
• insurance,
• extractive industries, and
• financial instruments. In addition, the statement suggests two new projects:
• a project on convergence of national and international standards, and
• a new 'improvements project' to clean up relatively minor matters in the existing IASC Standards. Other possibilities noted for the new Board's work programme include:
• share-based payment,
• narrative reporting,
• inflation accounting, and
• a review of the IASC Framework.

Comments due 19 Feb 2001.

US SEC Chairman Arthur Levitt has submitted his resignation, effective mid-February.

The report, Global Accounting Standards - Achieving the Goal, is being treated as an exposure draft by the UK Accounting Standards Board and is also endorsed by the IASC. Here's the ICAEW Press Release.

 

We have added pages (still under development) describing their recent activities with respect to IASC: IOSCO, the US SEC, and the European Commission.