This will surely encourage the European Commission and probably others towards a policy of actively altering IASC standards. The SEC has been instrumental in bringing about a structure that is capable of delivering accounting standards that would meet its exacting requirements for such standards. While recognising that the new system will inevitably involve some element of risk, the FRC believes it is a risk well worth taking to help introduce truly global accounting standards. We would therefore strongly encourage the SEC to endorse IASs produced by the new Board and the new structure it has been so instrumental in bringing about. There is a further reason why we suggest that the SEC should reconsider its plan to assess each IASC standard after its completion.
Accounting standards are frequently controversial.
The standard setting process should channel that controversy, weigh up the arguments on their merits and give an informed decision to settle the issue. It is for this reason that the technical competence and independence of the standard setter are so important, as the SEC itself has so often stressed. Members of the board will hardly be able to avoid looking over their shoulders to find a solution acceptable to these powerful interests who would have the ability to nullify the effects of the standard. This is precisely the sort of situation the SEC and others have striven so hard to avoid. Comparability may be achieved with respect to less detailed standards through common interpretation and practice by companies and auditors who are familiar with the standards.