The IASC: Overview and Proposed Changes

The IASC is made up of 142 member organizations from 103 countries. United States representatives include the AICPA, the Institute of Management Accountants, and the National Association of State Boards of Public Accountancy. The IASC board, which is made up of representatives from 13 countries and three professional groups, has the final authority over international accounting standards. The IASC conducts its meetings in English without translation.

Delegations for each of the voting members typically comprise three people. Some have technical support from the member organizations. For example, Patricia McQueen from the Association for Investment Management and Research in Charlottesville, Va., is a technical advisor to the International Council of Investment Associations and was a major contributor during the open discussion on March 16. Two staff members from the AICPA give technical support to the U.S. delegation.

The Need for Change

The standards-setting process was criticized because IASC member organizations chose the representatives to the board, and national standards setters such as FASB have no official voice. The board also received criticism when it did not allow the public to attend its meetings.

As a result of this criticism, the IASC formed a strategy working party to prepare a discussion paper and make recommendations on building an infrastructure that would converge its national accounting standards with high-quality global accounting standards.

The Proposed Structure Changes

The major changes recommended by the strategy working party in its discussion paper, "Shaping IASC for the Future," are as follows:

* A standards development committee made up of representatives from national standards setters and other groups, such as preparers, academics, and regulators, would play a major role in the development of new standards.

* The IASC board, the body responsible for approving proposed and final standards, would expand to include representatives from 20 countries and five other organizations with an interest in financial reporting.

* A board of trustees comprised of six members appointed by constituents and six members at large would appoint board and development committee members and chairs, based upon recommendations of a selection subcommittee.