Historical Context
The International Financial Reporting Standards Advisory Council (IFRS-AC) was established as a pivotal body to support the International Accounting Standards Board (IASB), which is responsible for developing a single set of high-quality, understandable, and enforceable global accounting standards. The IASB was founded in 2001, and the IFRS-AC serves as a bridge between the IASB and a diverse group of stakeholders including preparers, users of financial statements, and other key participants in the financial reporting process.
Structure and Composition
The IFRS-AC consists of around 50 members who represent a broad spectrum of backgrounds and expertise. These members include:
- Chief Financial Officers (CFOs) and Chief Accounting Officers (CAOs) from major international organizations.
- Leading financial analysts and academics.
- Regulators and standard setters in the accounting field.
- Partners from leading accounting firms.
Members of the IFRS-AC are appointed based on their expertise and are not compensated for their participation.
Key Responsibilities and Functions
Advising the IASB
- Priority Setting: The IFRS-AC advises the IASB on the prioritization of projects related to the development and revision of international accounting standards.
- Implications of Standards: The council provides feedback on the potential impacts that proposed standards may have on various stakeholders.
- Consultation Requirements: The IASB is required to consult the IFRS-AC prior to making decisions on major projects, ensuring that a wide array of perspectives is considered.
Supporting the IFRS Foundation Trustees
- The IFRS-AC is also consulted by the Trustees of the IFRS Foundation when making any amendments to the constitution of the foundation, ensuring a robust governance structure.
Meetings and Deliberations
- The council convenes at least three times a year, where members discuss and provide insights on various projects and strategic matters related to international financial reporting.
Importance and Applicability
The IFRS-AC plays a crucial role in maintaining the integrity and global consistency of accounting standards. By providing comprehensive advisory support to the IASB, the council helps ensure that international financial reporting standards are developed with due consideration of their practical implications for preparers and users of financial statements.
Related Terms and Comparisons
- IASB: International Accounting Standards Board; the primary body responsible for setting international accounting standards.
- IFRS Foundation: The organization that oversees the IASB and ensures the governance and funding of the standard-setting process.
FAQs
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Inspirational Quotes
“Financial reporting should not be a guessing game. It should be transparent, consistent, and comparably reliable.” – Unknown
Proverbs and Clichés
- “Numbers don’t lie, but they can tell different stories.”
- “Accountability through accounting.”
References
Summary
The International Financial Reporting Standards Advisory Council (IFRS-AC) is instrumental in guiding the International Accounting Standards Board (IASB) on the development and implementation of global accounting standards. With its diverse and expert membership, the IFRS-AC ensures that stakeholder perspectives are considered, fostering robust and comprehensive international financial reporting standards. Through regular consultations and advisory roles, the council contributes significantly to the integrity and transparency of global financial reporting.
