The International Accounting Standards Board (IASB) and the International Federation of Accountants (IFAC) announced today an agreement to strengthen their cooperation in developing private and public sector accounting standards.
The IASB is responsible for the development and promulgation of International Financial Reporting Standards (IFRSs), required or permitted for use by companies in more than 100 countries. IFAC supports the independent International Public Sector Accounting Standards Board (IPSASB), which is responsible for developing International Public Sector Accounting Standards (IPSASs). IPSASs are used by an increasing number of public authorities, including national and local governments, agencies and regulatory bodies from around the world, and by many international organizations.
The boards have worked together in the past: many IPSASs are primarily drawn from IFRSs, and the agreement, in the form of a Memorandum of Understanding (MoU), reflects the IASB’s and IFAC’s shared conviction that the transparency provided by high-quality financial reporting standards contributes significantly to the effective functioning of capital markets and sound economic growth. The agreement represents a further commitment to strengthen the cooperation between the two boards, with a view to ensuring greater consistency in their respective standard-setting activities.
The MoU also acknowledges the ongoing working relationship between the IASB and the International Auditing and Assurance Standards Board (IAASB), which is also supported by IFAC. As part of this relationship, the IAASB seeks to advise the IASB on issues surrounding verifiability and auditability of proposed accounting standards.
The agreement is consistent with the conclusions of the IFRS Foundation Trustees’ strategy review, which called for greater interaction between the IASB and other accounting standard-setting authorities.
Commenting on the agreement, Hans Hoogervorst, Chairman of the IASB, said, “The ongoing financial crisis has shown the importance of transparency in financial reporting by both private and public sector entities. This agreement strengthens the already close ties between the IASB and IFAC and will serve as a platform for further cooperation.”
IFAC Chief Executive Officer Ian Ball said, “The sovereign debt crisis has exposed the risk to financial stability from poor quality financial reporting by governments, and demonstrated that transparency is a prerequisite for confidence. International Public Sector Accounting Standards are the benchmark for financial reporting in the public sector and the means for governments to signal their commitment to transparency. This agreement accelerates the existing cooperation between the two boards and enhances the IPSASB’s ability to continue to develop high-quality standards.”
The MoU is available here.
About the IASB
The IASB was established in 2001 and is the standard-setting body of the IFRS Foundation, an independent, private sector, not-for-profit organisation. The IASB is committed to developing, in the public interest, a single set of high quality global accounting standards that provide high quality transparent and comparable information in general purpose financial statements. In pursuit of this objective the IASB conducts extensive public consultations and seeks the cooperation of international and national bodies around the world. The IASB has 15 full-time members drawn from 11 countries and a variety of professional backgrounds. By 2012 the Board will be expanded to 16 members. Board members are appointed by and accountable to the Trustees of the IFRS Foundation, who are required to select the best available combination of technical expertise and diversity of international business and market experience. In their work the Trustees are accountable to a Monitoring Board of public authorities. For more information visit www.ifrs.org
About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.
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