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The European Union reportedly wants to play a larger role in setting international accounting standards, which would diminish the influence of the United States.
Stephen Taub, CFO.com | US
March 11, 2005
A turf battle threatens to undermine efforts to establish one set of accounting rules for companies throughout the world.
The Financial Times reported that the European Union has formally requested that it play a larger role in setting international accounting standards, which would diminish the influence of the United States.
According to an EU proposal obtained by the newspaper, the European Union argues that for the appointment of new members to the International Accounting Standards Board, preference should be given to countries that applied the standards or had promised to implement them soon. The same consideration, continued the proposal, should be given to the board of trustees that oversees the IASB.
The United States, which does not follow international accounting standards, nonetheless has 4 seats on the 14-person IASB, according to the FT. North Americans and Europeans each account for 6 of the 19 trustees.
For years, many parties have hoped that U.S. and European accounting standards would converge, said Ken Wild, global head of international accounting standards at Deloitte. Added Wild, according to the FT, "If you reduce the American presence at this stage, you will put that back by years and years."
An EU official told the paper, "This is about finding the right governance and accountability structures for the IASB. The FT also noted that Paul Volcker, former chairman of the Federal Reserve and current head of the IASB trustees, is reluctant to give in to the EU's demands.