In a bid to raise confidence in the International Accounting Standards Board (IASB), reduce the size of the management board and strengthen funding, and improve the framework around International Financial Reporting Standards (IFRS) the IFRS Foundation has issued a public consultation
To improve accountantability and effectiveness, the Foundation is proposing that the IASB board is reduced from 16 to 13 members, which would require a geographic redistribution of seats. The plan is to reduce the normal allocation of members from four to three for Asia/Oceania, Europe and North America. In future, nine members would have to vote in favour of any new standard.
In addition, it is calling for a change to the constitution to allow IASB members to serve a maximum ten-year term, made up of two consecutive five-year terms.
The consultation is part of the IFRS Foundation’s requirement to conduct a five-yearly review into the working and governance standards at the IASB.
The 45-page document sets out a number of areas for review, including financial governance and accountability, the three-tier governance structure, as well as the scope and remit of the standard-setter both in terms of policing standards adoption and implementation, and writing clear and coherent standards which can be adopted without creating undue complexity.
