Get in there early to influence opinion

This IFRS blog has regularly focused on the need to get engaged early in the important standard-setting debates, so it was good to see my colleague Richard Sexton agreeing with that in his recent letter to the Financial Times...

Letter from Mr Richard Sexton, PwC Head of assurance, to the Financial Times:

Sir, The standard-setting process is an emotive one, partly because there are many who have an interest in the outcome. Certain groups struggle sometimes to communicate their views clearly, and indeed they wonder if they are listened to when they do. Richard Barker (Letters, November 2) rightly stresses that the standard-setters are still debating the appropriate structure of the performance statement. However, he suggests that it is the role of the discussion paper to promote "widespread debate, consultation and feedback". I disagree.

The discussion paper should not be the starting point. Rather than being prepared by the standard-setters prior to consultation, it should be a reflection of a full and open debate amongst the key stakeholders in the reporting model. Now is exactly the right time for all stakeholders to come together, while the discussion paper is being drafted and before views become entrenched. I therefore welcome the proactive and early contribution made by the investment community and hope that the standard-setters will do the same.

Preliminary findings from PricewaterhouseCoopers research shows that both investment professionals and preparers of accounts feel very strongly indeed about performance reporting. The strong congruence of views expressed by both users and preparers of accounts on the issue of earnings suggests that a pragmatic solution to the performance reporting challenge, built on the needs of professional investors and companies, is achievable. To propose radical change, even only in a discussion paper, before stakeholder consultation is rather like changing the offside rule in a practice match without talking to the players.

We are expecting a discussion paper from the IASB on the income statement in the second quarter of 2008, so this is a good time for all of us to air our views, both here, in other public forums and direct to the IASB. I will also be picking up on this theme in my future updates and sharing the results of our research on this topic.

Richard