Keeping the Promise of Global Accounting Standards

Policy Brief
July 2011

In this Policy Brief, PIIE Visiting Fellow Nicolas Véron provides a comprehensive analysis of the strategic challenges facing the attempt to harmonize the world's accounting practices through the global spread of International Financial Reporting Standards (IFRS). After taking stock of the initial successes of IFRS adoption, he identifies unsustainable features in the current governance framework of the IFRS Foundation, the organization that hosts IFRS standard-setting, and advocates reform to make the IFRS Foundation accountable not only to individual governments but also to the global investor community. He also proposes a variety of incentives for individual jurisdictions to converge towards IFRS, as such convergence looks set to be more gradual than had been envisaged by the IFRS Foundation in the past.