The Trustees of the International Accounting Standards Committee (IASC) Foundation, the oversight body of the International Accounting Standards Board (IASB), recently announced enhancements to their governance arrangements, which are aimed at enhancing public accountability, stakeholder engagement, and operational effectiveness.  Among other changes, the Trustees agreed to the following major revisions in the IASC Foundation’s Constitution, which are effective March 1, 2010:

• Emphasis on adoption of International Financial Reporting Standards (IFRSs) - The Constitution will emphasize that convergence is a strategy aimed at promoting and facilitating the adoption of IFRSs, but is not an objective by itself.
• A commitment to a “principle-based” approach - The Constitution will call for IFRS based upon clearly articulated principles.
• Names in use across the organization to be streamlined - The names in use across the organization will be more closely aligned with the standards. The IASC Foundation will become the IFRS Foundation, as soon as the practical arrangements can be made. The interpretations committee and advisory council will be known as the IFRS Interpretations Committee and IFRS Advisory Council, respectively. Stakeholders supported retaining the name of the IASB, and the Trustees concurred.
• Introduction of three-yearly public consultations on the IASB’s technical agenda - In addition to consulting the Trustees and its advisory council annually on the existing and future agenda, the IASB will undertake a three-yearly public consultation on its future technical agenda.
• Specific designation of investors - The new Constitution specifically identifies investors as a target audience for financial information (in addition to other participants in the world’s capital markets and other users of financial information).
• Improved language to account for a broad range of stakeholders, both by type and location - The Constitution will note the need to take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings.
• A requirement for due process and the introduction of an emergency procedure - The Constitution will include a provision for an accelerated due process only in the most exceptional circumstances and only after approval by at least 75 percent of the Trustees.

View an annotated version of the Constitution showing all revisions.

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