Chapter 5 Environment of International Research

IASB Role is to issue high-quality, enforceable, global financial reporting standards Several entities/procedures involved in standard setting: The Monitoring Board International Financial Reporting Standards Foundation (IFRS Foundation) IFRS Foundation Constitution (The Constitution) IFRS Advisory Council (The Advisory Council) The Board itself (IASB) The Interpretations Committee (IFRIC) IFRS for SMEs

Other Regional and National Standard-Setting Bodies and Influential Organizations DPOC - Due Process Oversight Committee Oversees the IASB and IFRIC due process procedures EFRAG – European Financial Reporting Advisory Group “Provides advice to European commission on all IFRS to the EU” 20 finance ministers and central bank governors representing 19 countries plus the EU IFAC – International Federation of Accountants Global organization of international accountants IOSCO – International Organization of Securities Commissions Develops, implements ,and promotes adherence to internationally recognized standards

IASB Authorities Most IFRS contain the following: An introduction Table of contents Objective Scope Definitions Actual standard List of voting IASB members Basis for qualifying or dissenting votes Appendices

IASB Due Process Six stages Input from working groups Plan the research project Develop and publish a discussion paper (optional) Develop and publish an exposure draft (ED) Draft an IFRS or publish a second ED Hold meetings with constituents with respect to implementation guidance

IFRIC Due Process IFRICs clarify IFRS or prevent diverging viewpoints Seven stage due process Study to identify the issue Agenda is set IFRIC meetings and voting occurs Draft interpretation is developed IASB is consulted Comment period allowed Interpretation is approved by IFRIC and IASB

Conceptual Framework Establishes objectives and concepts for development of accounting standards Board uses framework for developing future standards Preparers and researchers use the framework in the absence of published standards Framework (objectives, assumptions, qualitative characteristics, elements, capital maintenance)

IFRS Funding and Regulation Funding to the IASC Foundation is mostly voluntary A levy system has been introduced into several countries Local regulations govern the preparation and issuance of financial statements IASB does not have authority to require compliance, however there are committees that examine compliance with IFRS. The EU ensure consistency through Europeans Enforcers Coordination Sessions (EECS) and European Securities Committee (ESC) IOSCO regulates international markets through its working committees The SEC also examines cross-border regulatory compliance

IFRS Research Hierarchy All pronouncements have same authority, but there is a hierarchy presented in IAS No. 8 that is useful to the researcher: Apply specific IFRSs and if they do not apply, then Apply other IFRSs that involve similar or related issues Apply the IFRS framework Apply pronouncements of other standard setting bodies.

e-IFRS Available in several languages The electronic version is a replica of the bound manual released by the IASB. The IASC Foundation Constitution The Framework preface to IFRS IFRSs IAS IFRICS SIC Glossary Due process handbook for IASB and IFRIC

Searching in e-IFRS Glossary Terms referenced to each standard and paragraph number Directly go to standard of interest by perusing list Advanced search function can be refined by: Volume, standard, issue date, word stems, exact phrases, and connectors.