Call for international accounting standard
29 Nov 1995THE adoption of an international accounting standard would enhance the credibility of the profession, said Sir Bryan Carsberg, secretary-general, International Accounting Standards Committee (IASC).
Speaking to this paper in Dubai — where he is attending a seminar on international accounting standards — Carsberg said different standards adopted in different countries confused lay people, many of whom would think of accounting as “a primitive profession.”
The much-cited example of a German company — which reported profits according to its own home accounting standards, but saw a loss under American accounting standards — was another disadvantage of the existing divergent systems, he said.
It would also be cheaper if companies all over the world adopted a uniform accounting standard, felt Carsberg, who was earlier director-general of Telecommunications, and director-general, Fair Trading, in the UK.
He also referred to the agreement between the IASC and the International Organization of Securities Exchange Commission (Iosco), which has set 1999 as the target date for the formulation of uniform standards.
Carsberg admitted that implementation of these new standards would be a gradual procedure. “There can be no revolution in these matters, only evolution,” he remarked.
After the 1999 target date, companies wanting listings in stock exchanges around the world to adopt the Iosco-set standards.
Carsberg said that American companies would be among the last toadopt these standards, as they had less urgency in going in for overseas listing; US multinationals, however, would adopt these standards.
Speaking to this paper in Dubai — where he is attending a seminar on international accounting standards — Carsberg said different standards adopted in different countries confused lay people, many of whom would think of accounting as “a primitive profession.”
The much-cited example of a German company — which reported profits according to its own home accounting standards, but saw a loss under American accounting standards — was another disadvantage of the existing divergent systems, he said.
It would also be cheaper if companies all over the world adopted a uniform accounting standard, felt Carsberg, who was earlier director-general of Telecommunications, and director-general, Fair Trading, in the UK.
He also referred to the agreement between the IASC and the International Organization of Securities Exchange Commission (Iosco), which has set 1999 as the target date for the formulation of uniform standards.
Carsberg admitted that implementation of these new standards would be a gradual procedure. “There can be no revolution in these matters, only evolution,” he remarked.
After the 1999 target date, companies wanting listings in stock exchanges around the world to adopt the Iosco-set standards.
Carsberg said that American companies would be among the last toadopt these standards, as they had less urgency in going in for overseas listing; US multinationals, however, would adopt these standards.
He agreed that the adoption of a common accounting standard would be a long-drawn process, just as the adoption of the metric system has been a prolonged affair. But the longer a company delays adopting the new standards, the more expensive it will be for it in the long-term, said Carsberg.
Asked about the implementation of the new standards in the Arab world, Carsberg said it was important for countries here to adopt the new standards, especially as many were planning to set up new stock exchanges.
Dr. Barry Jay Epstein, US-based senior partner, Checkers, Simon & Rosner — who is also a member of the board of examiners, and chairman, auditing subcommittee, American Institute of Certified Public Accountants — said it vas a lot more difficult (politically, at least), for developed countries to adopt the new standards.
But, with the growing importance of the developing world in the global economy, pressures on the developed countries to adopt the new standards will increase, he said.
Epstein felt it was not a question of reluctance among American companies to adopt the new standards, as much as ignorance on their part. “For most companies in the US, the world revolves around America,” he said. ‘They don’t think beyond the US.”
It was only the ‘cognoscenti’ in the profession who were aware about these changes in accounting standards; others had ‘a self-centred focus’ and were not interested in these things, said Epstein.
The three-day seminar at the Dubai Inter-Continental Hotel — which concludes today — has been organised by Infocenter International, in association with Talal Abu-Ghazaleh International. It is supported by the Arab Society of Certified Accountants.
Asked about the implementation of the new standards in the Arab world, Carsberg said it was important for countries here to adopt the new standards, especially as many were planning to set up new stock exchanges.
Dr. Barry Jay Epstein, US-based senior partner, Checkers, Simon & Rosner — who is also a member of the board of examiners, and chairman, auditing subcommittee, American Institute of Certified Public Accountants — said it vas a lot more difficult (politically, at least), for developed countries to adopt the new standards.
But, with the growing importance of the developing world in the global economy, pressures on the developed countries to adopt the new standards will increase, he said.
Epstein felt it was not a question of reluctance among American companies to adopt the new standards, as much as ignorance on their part. “For most companies in the US, the world revolves around America,” he said. ‘They don’t think beyond the US.”
It was only the ‘cognoscenti’ in the profession who were aware about these changes in accounting standards; others had ‘a self-centred focus’ and were not interested in these things, said Epstein.
The three-day seminar at the Dubai Inter-Continental Hotel — which concludes today — has been organised by Infocenter International, in association with Talal Abu-Ghazaleh International. It is supported by the Arab Society of Certified Accountants.
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