Technical partners at the big accounting firms say this is the clearest sign that the IASC is having trouble meeting the ambitious timetable of establishing a core set of standards by April 1998. The original deadline of a year later was demanding enough, they maintain. Indeed, the IASC states that the move being recommended to its board meeting in Paris from 30 October to 4 November would mean that it is now likely to meet the timeframe agreed with the International Organisation of Securities Commissions.
Sir Bryan said that the body had completed standards in four of the 12 areas identified and had published exposure drafts in seven of the others, but in one case, financial instruments, a comprehensive standard was "no longer a realistic possibility".
Coincidentally, a fortnight after this announcement, Ernst & Young's technical department produced the latest edition of its monumental work on Generally Accepted Accounting Practices in the United Kingdom. As Ron Paterson, head of the department, explained, it contains a lengthy examination of the international dimension because the IASC's efforts are having an important effect on the activities of the Accounting Standards Board.
Although the book points out that the outcome of the IASC project cannot be predicted, it is clear that the authors believe it has great ramifications for domestic standard-setters. They reckon that the "considerable strain" will be keenly felt in the United States, where foreign companies are required to file accounts drawn up to comply with US GAAP. If this situation was relaxed, American companies might be expected to put pressure on the Financial Accounting Standards Board and the Securities and Exchange Commission to the effect that they should not have to comply with a regime seen as more demanding. Indeed, write Paterson and co, FASB might have put more pressure on itself by claiming to have identified more than 250 differences between US GAAP and the IASC standards.
But they add that the ASB is clearly not going to want international standards to be markedly different from those in the UK, either: "As a result, the process of finalising these core international standards is a highly political one, with the major standard-setters of the world all seeking to pull the international consensus in their own direction, knowing that, if they fail, they may be put under pressure to close the gap by amending their domestic standards instead."Reuse content