22 April 1999

Sir Bryan Carsberg
Secretary-General
International Accounting Standards Committee
166 Fleet Street
London EC4A 2DY
UNITED KINGDOM

Dear Sir

Shaping the IASC for the Future

The Group of 100 is pleased to comment on the Strategy Working Party Discussion Paper "Shaping the IASC for the Future". Our comments are set out below.

The Group of 100 supports providing a more specific focus for the objectives of the IASC. We believe that the IASC process must be transparent and that it cannot achieve its mandate without the support and co-operation of national standard-setters.

The IASC’s principal focus should be on setting standards for private sector entitites and as such should not be distracted or expend resources on public sector issues.

The participation of national standard-setters who have the resources and commitment to the development of a global set of accounting standards is essential to a robust and credible international standard-setter.

The Group of 100 supports the separation of a broadly constituted IASC Board with a strategic and oversight role from the Standards Development Committee. We consider that the proposed process for appointments to these bodies are appropriate.

The Group of 100 agrees that a properly constituted and resourced Standards Development Committee should have the capacity to and be responsible for setting accounting standards and preparing and issuing relevant documents as part of a due process.

The Group of 100 believes that the Standards Development Committee should have the role of developing high quality international accounting standards and that some form of review is an important safety valve. It is our understanding that there are few standard-setters who can develop standards without another body having a reserve power. For example, in Australia the Australian Accounting Standards Board has the responsibility to develop accounting standards which are subject to disallowance by the Federal Parliament.

While it is important for a reserve power to exist it is our view that such power would be used in rare and exceptional circumstances. The opportunistic use of such a power would be inimical to the credibility and longevity of the new structure.

The Group of 100 believes that the same voting requirements should apply to Standards, SIC Interpretations and Exposure Drafts.

The Group of 100 believes that :

a. meetings of the Standards Development Committee and the Standing Interpretations Committee be held in public;

b. Trustees meetings should be open to the public except for the discussion of staffing and remuneration;

c. a basis for Conclusions and dissenting opinions, if any, should be published in an International Accounting Standard;

d. public hearings and field tests on projects should be conducted where appropriate.

The opening of the process and the greater transparency must be accompanied by the timely provision of agendas and reporting the outcome of meetings.

The Group of 100 believes that the credibility of IASC standards can only be maintained if the IASC has the resources to assist regulatory agencies in the interpretation of international accounting standards and the review of national standards to assess that statements of compliance are supported.

As with standard-setting arrangements a secure and reliable source of funding is necessary. It is important that funding should be drawn from many sources in order to minimise the perception that the process does not have independence.

Yours sincerely,

Bryce JH Denison
National President

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