Mario Christodoulou, Accountancy Age, Wednesday 11 August 2010 at 09:28:00

"You are having an influence on our standards, but aren?t willing to take them your selves," Sir David says in interview

The US could be stripped of any influence over global financial rules if it does not adopt them itself, the head of the international accounting standard setter has warned.

Sir David Tweedie, chairman of the International Accounting Standards Board (IASB), believes US influence on standard setting may diminish if it rejects international accounting rules next year.

Sir David told the Journal of Accountancy, in a video interview, the US had a lot of influence on the creation of accounting rules despite not actually using the rules at domestically.

?One of the real dangers, if the US says no, is that there is a reaction and [international observers] want the US influence diminished,? he said.

?You will find for example that the [US influence] on the standards will be less, obviously, and if you decide to come in later on, you have standards that perhaps you?re not too keen on, that you had no influence over.?

The US is still deciding whether to adopt international accounting rules. The US standard setter, the Financial Accounting Standards Board, is attempting to harmonise its accounting rules with international standards.

Meanwhile, the US securities regulator, the Securities and Exchange Commission (SEC) is investigating the impact of international standards on US markets and expects to make a final decision in next year.

Despite this the US exerts considerable influence on standard setting. The US has four individuals on the 15-member IASB and five trustees on the 22-member oversight committee. SEC chairman, Mary Schapiro, also holds a seat on the IASB?s supreme oversight body, the Monitoring Board.

Sir David said this was causing consternation among international observers.

?People are saying, ?well, you are having an influence on our standards, but aren?t willing to take them your selves, are you in or are you out?,? he said.

?The message has been ?do you want these standards or not and if you don?t why should you have a major say in developing them?. That has really been the underlying concern?the decision next year will change the whole atmosphere.?

Further reading:

JOA: US Role in IFRS

The long and winding roadmap