Accounting Convergence and Enhanced Audit Quality
The G20’s communique following the London summit in April 2009 called on “the accounting standard setters to work urgently with supervisors and regulators to improve standards on valuation and provisioning and achieve a single set of high-quality global accounting standards”. The International Accounting Standards Board (IASB) has worked with the US Financial Accounting Standards Board (FASB) since then to develop converged accounting standards for financial instruments that deliver on this request, and the FSB has received regular progress reports from the two standard setters.
The convergence work is now nearing completion, but the outcome will be two different models for financial instruments and for insurance contracts. The FSB has welcomed the standard setters’ work and reaffirmed the continuing relevance of the objective of achieving a single set of high-quality global accounting standards. The FSB encouraged the IASB and FASB to monitor the consistent implementation of their respective standards and to continue to seek opportunities for further convergence. The FSB plans to hold a roundtable in early 2015 for standard setters, supervisors and regulators, and other stakeholders to discuss how to further promote consistency of implementation of the accounting standards for financial instruments.
The FSB has also been working with the International Forum of Independent Audit Regulators (IFIAR) and the Big 6 audit firms through their Global Public Policy Committee (GPPC) to enhance the audits of G-SIFIs. IFIAR has published two surveys of the quality of audits of G-SIBs (in 2013 and 2014) and is undertaking a third survey that will be published in 2015 and will reflect the step that the audit firms have taken to address points raised and to promote greater professional scepticism and audit quality.