International Accounting Standards Board

International Accounting Standards Board

International Accounting Standards Board
The International Accounting Standards Board (IASB) has the stated goal of supporting development of a single set of high quality international financial reporting standards (IASB, 2009, para. 1).   To understand how the IASB will accomplish this goal one must look at the structure of the IASB, what steps are involved in creating an international accounting standard in accordance with due process and understand the role of the International Accounting Standards Committee (IASC) Foundation.   Additionally, reviewing the most recent accounting standards issued will allow one to judge if the IASB is meeting that goal.  
The IASC Foundation is the governing body overseeing the standard setting IASB.   The IASC Foundation is governed by 22 trustees.   The trustees are individuals from diverse geographical and professional backgrounds.   They have senior executive experience in both the public and private sectors.   The trustees are responsible for oversight including funding.   The IASC bases the funding of the foundation based on four principles.   The first principle is broad based creating sustainable long-term financing to include major participants in the world’s capital markets.   The second principle is compelling by creating a system with enough pressure to prevent free riding.   The third principle is open-ended financial commitments that will not be contingent on any particular action that may infringe on the independence of the IASC Foundation or the IASB.   The fourth principle is country specific.   The burden of funding should be shared by the major economies of the world using gross domestic product as the key determining factor (IASB, 2009).   However, the IASC Foundation is not involved in any technical matters that relate to standards.   That is the sole responsibility of the IASB.
The IASB structure provides checks and balances.   A monitoring board approves trustees to the IASC Foundation and these trustees report to...