NASBA in Support of Independently Funded Accounting Standard Setting Board

August 5, 2009 — The National Association of State Boards of Accountancy (NASBA) supports the grand ideal of global accounting and auditing standards that are developed by highly qualified representatives of subscribing governments. “These standard setters and any standard setting body to which they’re attached must be truly independent,” noted NASBA President, David Costello, at the International Federation of Accountants (IFAC) G20 Accountancy Summit in London, July 23-24. Independence of such a standard setting body would include: consideration of funding sources, professional relationships, organizational structure and certainly membership composition.

The G20 Summit which brought together over 60 leaders from the international accounting profession called for governments and regulators to step up the initiatives to promote convergence to one set of global standards. The ideal of global standard setting and acceptance must also include the “critical elements of total transparency and vetting to all affected parties,” exclaimed Mr. Costello, referring to the unnecessary roadblocks International Financial Reporting Standards (IFRS) has experienced in the U.S. and other countries because all major affected regulatory, public interest and professional groups have not been principally involved in the discussions, debates and vetting of standards. “Regulators, professional organizations and standard setting bodies must work together to ensure that the interest of the public is at the forefront of all decisions,” he continued.

NASBA is working with international accounting and auditing regulators through its “Forum of International Accountancy Regulators” to be held on September 10-11 in San Francisco, California. The conference will address topics such as international regulation, legal challenges in uncertain times, and political pressures on standard setting, as well as other areas of importance.

It is not enough to have global accounting and auditing standards. There must also be an international code of ethics comprised of standards and guidelines to which professionals are held accountable. In his presentation to the international community, Mr. Costello noted, “Our current crisis of trust in the financial markets relates much more to ethics failures than failures to get the standards right.” NASBA maintains the need for a uniform code of ethics with a strong regulatory enforcement system to monitor and levy penalties for ethical violations.