The International Accounting Standards Board would no longer pursue convergence with its US peer as “an objective in itself”, its oversight body said on Monday, in a fresh sign of waning consensus on accounting rules. The IASB, which sets standards for most of the world outside the US, was nominated by the G20 to oversee development of a single accounting standard by mid-2011. But regulators and accounts say that politicisation of the accounting process will make it hard to achieve convergence of US and international standards.
So notes the FT. But it fails to note a lot in the process.
Most importantly, what it fails to note is that accounts are always political statements. No one can pretend otherwise. Capital is treated as meritorious, for example; labour is a cost to be minimised. Spending on replacing labour with plant and machinery is treated as creating an asset of value - the labour is just a loss offset. The whole process is value laden - as is the absurd claim by the International Accounting Standards Board that the only significant users of accounts are the suppliers of capital - a category that, as far as they are concerned includes labour until paid hereafter they have no interest in their employer at all.
So let's stop the nonsense about politicisation - you could not get more political organisations that the International Accounting Standards Board, PWC, Deloitte, Ernst & Young and KPMG, let lone the Institute of Chartered Accountants in England and Wales.
The reality is we need this process politicised: we need accounting disclosure back under democratic political control where it does belong undertaken in the public interest. And if the professions can't deliver they need to step aside and let the process be done properly.