AMERICAN ACCOUNTING ASSOCIATION
CONTACT: Ben Haimowitz (212-233-6170)
INVITATION TO COVER
IASB chairman, the world's "most powerful" accountant, will speak on current efforts to respond to world financial crisis
Speech comes in the wake of report expressing concern over political pressures to affect standards
"The Financial Crisis and Regulatory Arbitrage – A Real-World Stress-Test of Accounting Standards"
Address by Sir David Tweedie, chairman of the International Accounting Standards Board
DATE and TIME
Tuesday, August 4, 8:30-9:45 a.m.
Described last fall by the Financial Times as the world's "most powerful" accountant, Sir David heads the International Accounting Standards Board, which sets the International Financial Reporting Standards, the accounting rules used in most of the world. The United States, the major exception to IFRS' universality, published a roadmap for the rules' adoption last year.
The IASB chairman's speech comes in the wake of a major report issued July 28 by the Financial Crisis Advisory Group, which was formed at the request of the IASB and the US Financial Accounting Standards Board (FASB) to consider financial-reporting issues arising from the crisis.
Among other things, the report responds to criticism that so-called fair-value accounting (also called mark-to-market accounting) exacerbated the crisis by causing a significant overstatement of profits before the crisis and a severe overstatement of losses during the crisis.
"Whatever the final outcome of the debate over fair-value accounting," the report says, "it is unlikely that, on balance, accounting standards led to an understatement of the value of financial assets. While the crisis may have led to some understatement of the value of mark-to-market assets, it is important to recognize that, in most countries, a majority of bank assets are still valued at historic cost...By now it seems clear that the overall value of these assets has not been understated -- but overstated.":
The report also expresses concern "about the excessive pressure placed on [IASB and FASB] to make rapid, piecemeal, uncoordinated and prescribed changes to standards, outside of their normal due process procedures...While it is appropriate for public authorities to voice their concerns and give input to standard setters, they should not seek to prescribe specific standard-setting outcomes."
The IASB chairman's speech will be a highlight of the Annual Meeting of the 93-year-old American Accounting Association, which, with over 8,000 members, is a worldwide organization devoted to excellence in accounting education, research, and practice. Some 3,000 accounting scholars and practitioners, a record number, are expected to attend the meeting August 1-5 in New York City.