Monitoring Board, Trustees Reviewing IFRS Governance
After discussions during their fifth joint meeting early this month, the Monitoring Board and the Trustees of the IFRS Foundation will prop up coordination to take forward their efforts to review the Foundation’s governance and strategy.
The Monitoring Board will review the governance of IFRS Foundation while the Trustees will conduct a strategy review.
April 22 this year, the International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) have jointly issued a progress report on the development of their works on converging the International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP).
The report contained “substantial progress” on the Boards’ work on improving and aligning the IFRS with the US GAAP.
The Monitoring Board’s review will revolve around the composition and respective responsibilities and roles of the Monitoring Board, Trustees and IASB.
On the other hand, the Trustees will recommend operational aspects of due process and standard-setting oversight to four areas including the IFRS Foundation’s mission, governance, the standard-setting process, and financing of the Foundation.
“The Monitoring Board will develop and publish an action plan for implementation of its Governance Review with a desire to present, along with the Trustees, an integrated package of governance improvements,” said Masamichi Kono, Acting Chair of the IFRS Foundation Monitoring Board.
Although the reviews are conducted independently and separately, constitutional responsibilities of the Monitoring Board and Trustees interrelate the two.
The Monitoring Board and the Trustees expect to come up with an integrated package of measures for continued enhancement of the standard-setter’s governance through these reviews. The governance is likewise anticipated to reflect the increasing acceptance of IFRS worldwide.
The two bodies will make the improvements publicly available in August 2011.
After the 90-day comment period provided by the Monitoring Board and Trustees, a feedback statement for publication will be prepared for release in the coming months which will describe the Monitoring Board’s decisions and reasons.
By that time, the Monitoring Board plans to come up with an implementation program based on the improvements of the Foundation’s governance.
On the other hand, the Trustees already issued a report on their strategy review based on responses to their initial consultation document, with doors still open for the incoming comments received during the remaining consultation period.
The Trustees will organize public round tables in Hong Kong, London, New York and Tokyo to enhance stakeholder engagement during the consultation period.
After considering the actions that would result from the Monitoring Board’s governance review and the comments received in the process, the Trustees will issue a report on their measures.