IFRS Advisory Council

IFRS Advisory Council
Name	IFRS Advisory Council
Formation	2001
Type	Advisory body
Headquarters	London
Parent organization	International Financial Reporting Standards Foundation
Region served	International

IFRS Advisory Council The IFRS Advisory Council provides strategic advice to the International Accounting Standards Board and the Trustees of the International Financial Reporting Standards Foundation. It serves as a forum bringing together representatives from international financial institutions, stock exchanges, accounting firms, regulatory bodies, and standard-setting authorities to discuss issues affecting financial reporting. Members are drawn from a range of jurisdictions and institutions, offering perspectives from capital markets such as New York Stock Exchange, London Stock Exchange, and Tokyo Stock Exchange as well as from regulators like the Financial Conduct Authority and the Securities and Exchange Commission (United States).

Overview

The council functions within the governance architecture that includes the IASB, the IFRS Foundation, and national standard-setters such as the Financial Accounting Standards Board and the Accounting Standards Board of Japan. It connects stakeholders including the International Organization of Securities Commissions, the International Monetary Fund, the World Bank, and professional bodies like the Institute of Chartered Accountants in England and Wales, the American Institute of Certified Public Accountants, and the Institute of Chartered Accountants of India. The council's remit covers strategic priorities, stakeholder engagement, and the development of work programmes linked to financial reporting issues raised by entities such as the European Commission and the Asian Development Bank.

History and Establishment

Established following reforms to the governance of international standard-setting after high-profile corporate failures such as Enron and WorldCom, the council emerged as part of a wider restructuring that included the creation of the IFRS Foundation Trustees and reforms influenced by bodies like the G20 and the Financial Stability Board. Its origins trace to efforts involving the International Accounting Standards Committee and dialogues with national authorities including the Australian Securities and Investments Commission and the Canadian Public Accountability Board. Over time the council has interacted with reforms prompted by events such as the Global Financial Crisis of 2007–2008 and policy initiatives by the European Financial Reporting Advisory Group and the International Federation of Accountants.

Membership and Composition

Membership comprises representatives nominated by organisations including stock exchanges, accounting firms, investor groups such as BlackRock and Vanguard, banking associations like the Bank for International Settlements, and audit regulators such as the Public Company Accounting Oversight Board. Members typically include chief executives, standard-setters from bodies like the Canadian Accounting Standards Board, academics affiliated with institutions such as London School of Economics, and former officials from the Ministry of Finance (United Kingdom) or the U.S. Department of the Treasury. The council seeks geographic and stakeholder balance with members from regions represented by entities like the African Development Bank, the Inter-American Development Bank, and the Asian Infrastructure Investment Bank.

Roles and Functions

The council advises the IFRS Foundation Trustees and provides input to the IASB on agenda priorities, strategic direction, and stakeholder outreach. It evaluates the broad implications of standard-setting projects initiated by the IASB—including work on lease accounting inspired by interest from the International Swaps and Derivatives Association and revenue recognition issues linked to companies listed on the Nasdaq Stock Market. The council also comments on education initiatives involving universities such as Harvard Business School and professional training programmes run by organisations like the Chartered Institute of Management Accountants.

Interaction with IASB and Standard-Setting

The council interacts with the IASB through formal meetings, advisory papers, and liaison with technical bodies such as the International Auditing and Assurance Standards Board and the European Securities and Markets Authority. It provides stakeholder perspectives that affect projects with wide-reaching implications for multinational corporations like Toyota Motor Corporation, BP, and Apple Inc.. Its advice has influenced debates involving convergence with the Financial Accounting Standards Board on projects spurred by memoranda of understanding involving the US Department of Commerce and the European Commission.

Meetings and Outputs

The council meets periodically, often aligning its sessions with plenary meetings of the IASB in locations such as London, Frankfurt, and Zurich. Outputs include formal reports, letters, and public statements addressed to the IFRS Foundation Trustees, reflecting input from constituencies including investor networks like the ICGN and audit firms such as PricewaterhouseCoopers and Deloitte. The council’s discussions have been documented in agendas that reference topics raised by entities like the World Economic Forum and the Organisation for Economic Co-operation and Development.

Criticism and Impact

Critics have scrutinised the council’s composition and perceived influence, citing concerns voiced by national lawmakers such as members of the United States Congress and by trade organisations including the Confederation of British Industry. Debates have involved issues raised during the Greek government debt crisis and by corporate governance advocates associated with the Council of Institutional Investors. Supporters argue the council enhances legitimacy by bringing together participants from central banks like the Bank of England and multilateral agencies like the United Nations Conference on Trade and Development. Its impact is visible in how strategic advice has shaped IASB priorities and responses to market events involving major corporations and financial institutions including Citigroup and Deutsche Bank.

Category:International accounting