ABSTRACT
This chapter discusses how the IFRS Foundation and the Monitoring Board together provide a governance mechanism for the International Accounting Standards Board (IASB) in the process of setting International Financial Reporting Standards (IFRS Standards). The IASB applies a conceptual framework, and operates consultation through due process, in developing accounting standards. The International Federation of Accountants (IFAC) has established boards to deal with public sector accounting, auditing, ethics and education, each of which now sets its own standards and guidance. The IASB faces challenges which include recognising the requirements of small and medium-sized entities; the relation between IFRS Standards and US GAAP (generally accepted accounting principles) as two leading accounting systems globally; meeting the needs of emerging economies; and enforcement of standards. Research papers summarised in this chapter include coverage of how companies make the transition from national standards to IFRS Standards; whether accounting quality is related to improvements in accounting standards; how professional investors use IFRS-based financial reports; how IFRS Standards can be applied to small and medium-sized entities (SMEs); and whether the IASB’s due process is effective for all stakeholders.
