The move toward global convergence in accounting standards -- a much discussed topic in finance -- is the focus of a landmark print symposium published in the April 15 edition of the Northwestern University School of Law’s Journal of International Law and Business (JILB).
Contributors include a number of the accounting world’s most influential leaders, including Sir David Tweedie, International Accounting Standards Board chair, and Alexander Schaub, the European Commission’s Director-General for the Internal Market.
David Ruder, former chair of the U.S. Securities and Exchange Commission and professor at Northwestern University School of Law is the driving force behind the symposium and is among the seven expert commentators who address the controversies and possibilities of convergence.
The International Accounting Standards Board (IASB) has been working with national standard-setters around the world to end inconsistencies of accounting standards -- rules governing corporate financial reports -- which differ from nation to nation.
European companies, for example, must reconcile their financial reports to U.S. accounting standards in order to list their securities on U.S. stock exchanges, and vice versa.
In a major move toward global convergence, IASB standards recently were accepted by the European Union for use by all of the E.U.’s roughly 7,000 exchange-listed companies. Meanwhile, U.S. and Japanese accounting standards are being revised in tandem with IASB’s standards to move closer to convergence.
The convergence of accounting standards will produce a global securities market that expands possibilities for dramatic worldwide economic growth.
Among the issues covered in Northwestern’s Journal of International Law and Business spring symposium is the significant impact lobbying by businesses has had on the movement toward convergence. That includes last year’s near passage of a bill in Congress that would have prevented the U.S. Financial Accounting Standards Board (FASB) from revising stock-option accounting standards to make them more similar to IASB standards. The FASB sought to follow the IASB’s lead in requiring companies to count stock options as expenses on their financial statements, and a sustained lobbying effort nearly persuaded Congress to insert itself into the standard-setting process. In Europe, opposition by business interests, particularly banks, to the IASB’s approach to the reporting of derivatives caused delays in the adoption of some IASB standards.
Besides Ruder, Tweedie (and co-author Thomas R. Seidenstein, director of operations, IASC Foundation) and Schaub, contributors to this JILB issue include Robert Herz, chair of the Financial Accounting Standards Board; Donald Nicolaisen, chief accountant of the Securities and Exchange Commission; Mary Tokar, member of the IASB’s International Financial Reporting Interpretations Committee; and Mitsuru Misawa, professor of finance at the University of Hawaii and former trustee of the Industrial Bank of Japan.
Copies of the Journal of International Law and Business symposium issue on the convergence of accounting standards (April 15, 2005) may be ordered at www.law.northwestern.edu/jilb/symposium.html. Celebrating its 25th anniversary, the JILB is the number-one-ranked international trade law journal in the United States, according to ExpressO, an online law-review submission service.