“There are two key activities coming to a head this year,” he noted. “First, the IASB and the FASB are now nearing the completion of a nine-year program to improve International Financial Reporting Standards and US generally accepted accounting principles and to bring about their convergence. Second, the U.S. Securities and Exchange Commission will make a decision on the use of IFRS by U.S. domestic companies.”
This is also the year when Tweedie will be retiring from his chairmanship of the IASB after a decade as the head of the most powerful accounting standard-setting organization in the world. He is finishing his last term on June 30, and will be succeeded by Dutch financial markets regulator Hans Hoogervorst (see Hoogervorst Named as Next IASB Chairman).
“The SEC’s decision will be felt well beyond the borders of the United States,” Tweedie noted. “Today, more than 100 countries either require or permit the use of IFRS for listed companies in their domestic markets. This includes, among the Group of 20 members, Australia, Brazil, Canada, the 27 member states of the European Union, Korea and Mexico. However, China, India and Japan have yet to make a formal and full commitment to domestic adoption of IFRS. Their work towards adopting IFRS in their countries has been, in part, predicated on the implicit understanding that a truly global accounting standard must include the United States. They are therefore closely watching the SEC’s decision.”
Tweedie emphasized the need for the IASB to remain independent and not beholden to national, regional or special interest pressure. He likened it to the U.S. standard-setter, the Financial Accounting Standards Board. “A number of commentators, particularly in the United States, have questioned whether the IASB is more susceptible to undue political pressure than national standard-setters,” he added. “I will not deny that we do get our share of pressure. So has the FASB and every other accounting standard-setter that I have observed.”