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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, 2007, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

More Interference Ahead For IASB
Location: BlogsAAO Weblog (Public)    
Posted by: Jack Ciesielski 2/3/2005 8:46 AM
The Financial Times reports that Charlie McCreevy, EU internal market commissioner, wants the European Union to have more influence over the accounting standard setter. Quoting McCreevy from the article:

“Representation within the international standard-setter and within a public oversight body should correspond more appropriately to jurisdictions that directly apply the standards... We need a more welcome approach from the IASB and more effort to find common ground. We all want decision-making that is free from undue political interference, but the standards it draws up must meet the needs of users and be in touch with business reality"

Those aren't comforting words for the IASB to hear, nor for the financial statement users who stand to benefit from a neutral development of the international accounting standards. The IASB had a bruising dust-up with the EU in the past year over its construction of IAS 39, which called for derivatives accounting similar to what is employed in the United States (Statement 133). Read between the lines, and you get the feeling that what McCreevy really wants isn't neutral standards that reflect the economics of preparers, but standards that more accurately reflect the desires of preparers in the EU.

According to another article in the Financial Times, McCreevy seems quite intent on limiting the IASB's actions.

The American model of political interference with accounting standard setting, perfected in the stock option battles of the last ten years, looks like it will adapt pretty well to the international scene.
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