The IASB is in the dock

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Another story mentioned here recently has moved on to the national press.

The Observer has noted that:

Sir David Tweedie, chairman of the International Accounting Standards Board (IASB), is to be grilled on Tuesday by European finance ministers and senior EU commissioners.

The development comes as speculation mounts that the IASB will be reformed as a result of the financial crisis. It could even lose its powers to set international accounting standards.

As it notes:

A growing body of opinion is unhappy with the IASB. It approved accounting principles that allowed financial institutions to book profits from unrealised assets.

And there’s a twist:

There are also concerns among European power brokers, particularly within France and Germany, that the IASB is an "interconnected old boy's network". A third of its board had worked for KPMG or firms that KPMG later acquired.

Tweedie is, of course, one of those.

I’ve said it before, and I’ll say it again: chums can’t regulate chums. When they do it ends in tears. A lot have flown since 2007, and the International Accounting Standards Board has been responsible directly and indirectly for quite a lot of them.