Consider the stakeholders, be more open about agenda-setting, accelerate the Board’s due process – these are some of the key recommendations arising from the IASCF’s consultation exercise aimed at improving the IASB’s accountability.
The points raised in the consultation paper, published on 9 September as part of the IASCF’s constitutional review could have far-reaching implications for the standard-setting process. Let’s look at some of the most important areas, which I also raised at the recent London roundtable.
Stakeholder perceptions
Many of the concerns that have been raised regarding the IASB’s accountability have been as much about behaviours and perceptions of the organisation’s willingness to listen and respond to input, as they have about the constitutional arrangements. There is evidence that the IASB and the IASCF have been better at listening to outside input recently. However, public perception to the contrary seems to persist and can be difficult to overcome. Some constituents feel that the constitutional changes overall seem relatively modest as the end-product of an 18 month-process of deliberation. The IASB will need to demonstrate in its actions and behaviours that it is responsive to constructive input.
Accountability, agenda-setting & due process
Many stakeholders argue that the process of setting the IASB’s technical agenda and work priorities should be more transparent, with clearly understood channels through which stakeholders can provide input and reactions, while not becoming overly bureaucratic.
The proposal to require the IASB to consult with the Trustees and the Standards Advisory Council (SAC) on agenda decisions is helpful, as is the proposal to enable the general public to provide input on papers on the Board’s agenda.
That said, there could be a greater emphasis on ‘feedback loops’, which would require the IASB to be accountable for its positions. Of course, the ultimate decision on the agenda should be made by the IASB itself; but if, for example, the SAC has provided advice on the IASB’s work priorities and the IASB has chosen not to follow that advice, it should explain and justify its reasons for doing so. A similar principle applies to other aspects of the IASB’s due process. If a sizeable proportion of comment letters on a draft pronouncement indicate that constituents are opposed to or have significant concerns about the IASB’s proposals, the IASB should be required to explain and justify its reasons for following a particular course.
Accelerated due process
While it is important that the IASB should be permitted to consult quickly on emergency situations, it is also important that stakeholders have the opportunity to comment on proposed changes. There should still be due process, even if that process is accelerated.
People can move quickly when the need arises, but it is unrealistic to expect stakeholder organisations to assess and comment on complex accounting proposals in anything less than 30 days.
It may be easy to put a subject such as constitutional review towards the bottom of the ‘to do’ list, as I have said before. After all, there will be little impact on the day jobs of most people, certainly in the shorter term. But the questions raised in this review are important and go to the heart of the future of standard setting on the global stage.
As always, I am interested to hear your views, either by commenting here or by email.
Comments