The Progress towards Global Accounting Standards Discussed by Chairman Michel Prada

Thursday, October 24, 2013 Print Email

Michel Prada, the chairman of the IFRS Foundation Trustees, delivered a speech titled "The bumpy path towards global accounting standards" in which he discussed the progress of and hurdles in the path of development of global accounting standards. He was addressing a stakeholder event that was sponsored by the IFRS Foundation and the DRSC (the German standard setter). In his speech he said that the work of the International Accounting Standards Board (IASB) will always be controversial and it will face criticism but the progress achieved by the IFRS in Europe must be protected. He also stressed upon the importance of collaboration between the IASB and the IFRS foundation.

Mr. Prada discussed his thoughts and opinions about the adoption of IFRS by the Europe and said that the standards should be protected in their entirety. He discouraged the customization of the IFRSs for use in the Europe. He was of the opinion that if the standards are customized, they will lose their compatibility with the rest of the world. He quoted Philippe Maystat's draft report that warns that ""a tweak here, a failure to endorse there and very quickly you can have Standards that are once again incompatible with other parts of the world. . . . We all need to be vigilant to ensure that Europe continues to be a champion in global financial accounting reporting, for the good of Europe and for the stability of the global financial system".

Further on, he examined and discussed the challenges of achieving transparency and maintaining legitimacy. He said that "The IFRS Foundation is a private sector, not for profit, organisation acting in the public interest. As such, it has had, together with the IASB, to earn its legitimacy."

He then discussed the importance and significance of collaboration among the regional and national standard-setting bodies. He highlighted the fact that a better collaboration among these bodies will allow consistency in adoption and implementation of IFRS to a greater extent.

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