The G20 finance minister’s communiqu?© says:
We expressed the importance we place in achieving a single set of high quality, global accounting standards and urged the International Accounting Standards Board and the Financial Accounting Standards Board to redouble their efforts to that end. We encouraged the International Accounting Standards Board to further improve involvement of stakeholders.
This is, of course, totally appropriate. Stakeholders are probably the biggest users of accounts. And they come in a wide variety of forms – as I have documented in this briefing sheet.
More importantly, this is happening at the time that the IASB has published a response to the biggest ever demand to the IASB that it consider stakeholder needs. This is, of course, the demand that it supply country-by-country reporting for the extractive industries. My full response to that IASB proposal is published here.
The most telling feature of that IASB response is, however, the refusal of the IASB to consider the needs of stakeholders when setting accounting standards. As they say in their report (6.11):
In Chapter 1 the project team proposed that, for the purposes of this discussion paper, financial reporting should be regarded as including information that:
(a) helps users of financial reports to make decisions;
(b) can reasonably be viewed as being within the scope of a complete set of financial statements; and
(c) meets a cost-benefit test.
The IASB, however, notes (6.10):
the Framework indicates that financial reporting is primarily directed to meet the needs of existing and potential equity investors, lenders and other creditors (ie capital providers). Information that is useful to capital providers for making decisions may also be useful to other users of financial reporting. These other users include suppliers, customers and employees (when not acting as capital providers), as well as governments and their agencies and members of the public.
In other words, the IASB explicitly rejects the notion that stakeholders have any interest in financial statements and refuse to recognise their needs because they deny they exist.
In that case what chance is there that the IASB will do as the G20 asks?
Without an explicit response – or without explicit movement on the issue of country-by-country reporting – which is now the biggest campaign for accounting information ever mounted by civil society – there is no chance of thinking that they will meet the G20’s reasonable demand.
That leaves the G20 with one option: the IASB will have to be taken under international control.