The Development of Internationally Acceptable Accounting Standards: A Universal Language for Finance in the 21st Century?

Securities Regulation Law Journal

Volumn 27, Issue 3, 1999, Pages 324-365

  Steinberg, Marc I ^a   Arner, Douglas W ^a   Olive, Christopher D ^a  

^a NONE

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EID: 0033262885     PISSN: 00979554     EISSN: None     Source Type: Journal    
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References (243)

1. See Cheney, "Western Accounting Arrives in Eastern Europe," 170 J. Accountancy 40 (Sept. 1990) (describing accounting as the "language of production and transaction" and discussing difficulties in integrating Eastern Europe and Western countries due to differences in accounting).
2. U.N. Centre on Transnational Corporations, International Accounting and Reporting Issues: 1989 Review iii (1990). See also Thomas, "International Accounting and Reporting - Developments Leading to the Harmonization of Standards," 15 N.Y.U. Int'l L. Pol. 517(1983).
3. U.N. Centre on Transnational Corporations, International Accounting and Reporting Issues: 1989 Review iii (1990). See also Thomas, "International Accounting and Reporting - Developments Leading to the Harmonization of Standards," 15 N.Y.U. Int'l L. Pol. 517(1983).
4. See generally, G-22, Reports on the International Financial Architecture (Oct. 1998).
5. T. Evans, M. Taylor O. Holzmann, International Accounting and Reporting 85-86 (1985).
6. See SEC Staff Report, Internationalization of the Securities Markets IV-8 (1987). A study of international accounting problems has confirmed that the lack of international accounting standards greatly diminishes the utility of financial statements in world markets. See Scott Torberg, Eighty-Eight International Accounting Problems in Rank Order of Importance - a DELPHI Evaluation (1980).
7. See SEC Staff Report, Internationalization of the Securities Markets IV-8 (1987). A study of international accounting problems has confirmed that the lack of international accounting standards greatly diminishes the utility of financial statements in world markets. See Scott Torberg, Eighty-Eight International Accounting Problems in Rank Order of Importance - a DELPHI Evaluation (1980).
8. The case of Daimler-Benz is illustrative in this context: In 1994, its reported profit under German accounting rules was DM 895 million, whereas its profit under U.S. accounting rules was DM 1,052 million. In 1993, however, accounting under German rules showed a profit of DM 615 million, but U.S. rules led to a loss of DM 1,839 million. Brian Carlsberg, "Harmonizing Accounts Worldwide," Financial Times, Jan. 12, 1996, at XII.
9. 7 A survey of multinational corporations indicated that the greatest potential benefit of harmonization would be the acceptance by stock exchanges around the world of "one set of accounts" complying with international accounting standards, instead of requiring different financial information prepared in accordance with local accounting standards. "Support for International Standards," 169 J. Accountancy 15 (Apr. 1990).
10. Reports on the International Financial Architecture, supra note 3.
11. See Burkholder, "International Accounting Standards Panel Accelerates Release of Rule," 28 Sec. Reg. L. Rep. (BNA) 540 (1996) (quoting Dennis Beresford, chairman of the U.K. Financial Accounting Standards Board (FASB)).
12. The current Member States of the E.U. are: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom. The following States are presently in negotiations to join the E.U., and as such are committed to adopting the entire body of law of the E.U., the acquis communutaire, including that pertaining to accounting: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia. See Norton, "Reflections on the Development of Capital Markets, Stock Exchanges and Securities Regulations in Central and Eastern Europe," in U. Drobnig, K. Hopt, K. Kötz E-J Mestmächer, System Transformation in Mitttel- und Osteuropa und ihre Folgen fur Banlan (1998).
13. Treaty Establishing the European Economic Community, Mar. 25, 1957, 298 U.N.T.S. 11 [hereinafter Treaty of Rome], art. 7.
14. Treaty of Rome, art. 58.
15. Id., art. 54(3)(g).
16. See Warren, "Global Harmonization of Securities Laws: The Achievements of the European Community," 31 Harv. Int'l L.J. 185, 197-198 (1990) (discussing development of E.C. company law).
17. Id.
18. Id. The basic legal approach to harmonization of company law has a two-fold aim: (i) to remove obstacles to companies' freedom of establishment in order to expand and improve market competitivity; and (ii) to establish an equivalent degree of protection throughout the Community for the various constituencies. Id. at 309. See Treaty, art. 54, s. 3g. The second approach is to allow enterprises to create new or combine existing cross-border operations on the basis of E.C. rather than national laws. Annex, at 309. See Treaty, arts. 235, 100A
19. First Council directive of 9 Mar. 1968 on co-ordination of safeguards which, for the protection of the interests of members and others, are required by Member States companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community, 68/151/EEC, OJ No. L65 (1968).
20. Fourth Council Directive (78/660/EEC) of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies, OJ No. L222 (1978), as amended by Directive 84/569/EEC, OJ No. L 314 (1984), Directive 90/604/EEC, OJ No. L 317 (1990), Directive 90/605/EEC, OJ No. L 317 (1990), and Directive 94/8/E.C., OJ No. L 82 (1994).
21. Eighth Council Directive (84/253/EEC) of 10 Apr. 1984 based on Article 54(3)(g) of the Treaty on the approval of persons responsible for carrying out the statutory audits of accounting documents, OJ No. L 126 (1984).
22. Council Directive (91/674/EEC) of 19 Dec. 1991 on the annual accounts and consolidated accounts of insurance undertakings, OJ No. L 374 (1991).
23. Seventh Council Directive (83/349/EEC) of 13 June 1983 based on Article 54(3)(g) of the Treaty on consolidated accounts, OJ No. L 193 (1993).
24. Council Directive (86/635/EEC) of 8 Dec. 1986 on the annual accounts and consolidated accounts of banks and other financial institutions, OJ No. L 372 (1986).
25. Council Directive of July 25, 1978 (78/66/EEC).
26. Id. art. 47.
27. Id. art. 2, §§ 4(4), 43.
28. 26 Id. art. 2, para. 3.
29. Id. at art. 46.
30. Id. at art. 51.
31. Id. at arts. 9-10. Auditing is discussed in more detail in Section IV, infra.
32. Id. arts. 23-24.
33. Id. art. 43.
34. Id. § 7.
35. Id. art. 43.
36. Id. art. 40.
37. Id. art. 35(b).
38. 349/EEC, 26 O.J. (No. L 126) 20 (1984).
39. European Commission, Accounting Harmonization: A New Strategy vis-a-vis International Harmonization, Communication from the Commission, COM 95 (508), Nov. 1995. See European Commission, "Commission Proposes a New Strategy for the Improvement of the Financial Reporting Framework for Companies in Europe," Press Rel. IP/95/1234 (14 Nov. 1995).
40. Id.
41. "Speech by Commissioner Mario Monti at the Conference on the Role, the Position and the Liability of the Statutory Auditor in the E.U.", Brussels, 6 Dec. 1996, E.C., Speech/96/322, Rapid (6 Dec. 1996).
42. European Commission, Concerning Certain Articles of the Fourth and Seventh Directives on Accounting, XV/7009/97.
43. European Commission, "Accounting: Interpretative Communication Concerning Directives on Annual and Consolidated Accounts," Press Rel. IP: 98/75, RAPID (22 Jan. 1998).
44. European Commission, An Examination of the Conformity Between the International Accounting Standards and the European Accounting Directives (1996).
45. See European Commission, Directorate General XV, Accounting for the Introduction of the Euro (1997) and Preparing Financial Information Systems for the Euro, XV/7038/97 (15 Dec. 1997).
46. The founding members were Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the U.K., Ireland, and the U.S. See IASC, Objectives and Procedures, § 9000.24 (1983).
47. See the IASC website at http://www.iasc.org.uk/. See also Securities and Exchange Commission, "Report on Promoting Global Preeminence of American Securities Markets" (Oct. 1997), at 7 [hereinafter SEC International Accounting Report].
48. See the IASC website at http://www.iasc.org.uk/. See also Securities and Exchange Commission, "Report on Promoting Global Preeminence of American Securities Markets" (Oct. 1997), at 7 [hereinafter SEC International Accounting Report].
49. IASC, Objectives and Procedures, § 9000.33 (1983).
50. See "IASC Moves to United Worldwide Standards," 165 J. Acct. 22, 26 (June 1988).
51. See Herbert, "Developments in the Harmonization of Accounting Standards," ALI-ABA Conference on the Internationalization of Capital Markets, 102 (1981).
52. Note, however, that the IASC in recent years has been making efforts to eliminate alternatives, thereby increasing the possibility of real harmonization. See Harmonizing Accounts Worldwide, supra note 6, at XII.
53. See "Obstacles to a Global Accounting Deal," Financial Times, Surveyendash;Mastering Finance, at 2 (May 19, 1997).
54. See SEC International Accounting Report, supra note 45, at 8.
55. Id. at 8.
56. Id.
57. Id.
58. Id.
59. Id.
60. Id.
61. IASC Constitution No. 2, in Objectives and Procedures, Appendix 2, § 9000.58.
62. Preface to Statements of International Accounting Standards No. 4, in Objectives and Procedures, § 9000.60.
63. Preface to Statements of International Accounting Standards No. 19, in Objectives and Procedures, § 9000.60, Appendix 4.
64. See infra notes 86-87 and accompanying text.
65. 62 Harmonizing Accounts Worldwide, supra note 6 , at XII.
66. SEC International Accounting Report, supra note 45, at 9.
67. Id. at 9.
68. Id.
69. Id. at 10.
70. Id.
71. Id.
72. Id.
73. Id.
74. Id.
75. Id.
76. Id.
77. IASC concluded that completion of this core set was a desirable objective for IASC in any event, and acceptance of this goal made an agreement possible under which both IOSCO and IASC would cooperate in order to fulfill an objective that was in the best interest of both organizations. Id. See infra note 92 and accompanying text.
78. See Burkholder, supra note 9, at 540.
79. Id. Highlights of the IASC work plan include: (i) issuance of a final statement on international accounting standards on income taxes in June 1996; (ii) revised standards on intangible assets, research and development, and goodwill, also in June 1996; (iii) international accounting standards on earnings per share in Jan. 1997, following issuance of a disclosure document in Sept. 1996; (iv) final standards on business segment reporting in Mar. 1997; and (v) final rules on financial instruments and investments, interim reporting, discontinued operations, and provisioning and contingencies, all in Mar. 1998. Id.
80. Id. (citing joint IOSCO/IASC statement of July 1995)
81. See SEC International Accounting Report, supra note 45, at 11.
82. Id. at 6.
83. Id. at 8-9.
84. Id. at 9.
85. Id.
86. Id.
87. Id.
88. Id. at 7.
89. Id. at 15 ("IOSCO is an organization that operates on the basis of consensus, rather than majority votes.").
90. Id.
91. Id.
92. Id. at 14.
93. Id.
94. Id.
95. Id. at 12.
96. Id. at 15.
97. Id.
98. IAS 22, Business Combinations (1.1.85) (revised July 1998).
99. IAS to be developed.
100. IAS 25, Accounting for Investments (1.1.87) (currently under review, see infra).
101. IAS 32, Financial Instruments: Disclosures and Presentation (1.1.96) (currently under review, see infra).
102. IAS 1, Presentation of Financial Statements (1.7.98) (revised 1997) (replaced IAS 1, Disclosure of Accounting Policies, which remained in effect until 1.7.98).
103. IAS 8, Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies (1.1.79).
104. IAS 1, supra note 99.
105. IAS 18, Revenue (1.1.84).
106. IAS 11, Construction Contracts (1.1.80).
107. IAS 2, Inventories (1.1.76) (revised 1993).
108. IAS 4, Depreciation (1.1.77) (revised 1974) and IAS 16, Property, Plant and Equipment (1.1.83) (revised 1993) (currently being revised).
109. IAS 4, Depreciation (1.1.77) (revised 1974) and IAS 16, Property, Plant and Equipment (1.1.83) (revised 1993) (currently being revised).
110. IAS 36, Impairment of Assets (1.7.99) (issued June 1998. Effective for financial reporting periods beginning 1 July 1999).
111. IAS 12, Income Taxes (1.1.98) (this replaced IAS 12, Accounting for Taxes on Income, which remained in effect until 1.1.98) (revised 1996 and effective for financial reporting periods beginning on or after 1 Jan. 1998).
112. IAS 12, Income Taxes (1.1.98) (this replaced IAS 12, Accounting for Taxes on Income, which remained in effect until 1.1.98) (revised 1996 and effective for financial reporting periods beginning on or after 1 Jan. 1998).
113. IAS 8, Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies (1.1.79) (revised 1993).
114. IAS 20, Accounting for Government Grants and Disclosure of Government Assistance (1.1.84) (revised 1983).
115. IAS 19, Employee Benefits (1.1.85) (revised Jan. 1998 and effective for Reporting Periods beginning 1 Jan. 1999).
116. IAS 19, Id.
117. IAS 38, Intangible Assets (1.7.99) (issued Sept. 1998 and effective for annual financial statements covering periods beginning on or after 1 July 1999).
118. IAS 23, Borrowing Costs (1.1.86) (revised 1993).
119. E62, Financial Instruments: Recognition and Measurement (Exposure Draft June 1998).
120. IAS 16, Property, Plant and Equipment (1.1.83) (revised 1998).
121. IAS 17, Accounting for Leases (1.1.84) (to be superseded by IAS 17 [revised 1997], Leases, effective 1.1.99).
122. IAS 2, supra note 104.
123. IAS 12, supra note 107.
124. IAS 21, The Effects of Changes in Foreign Exchange Rates (1.1.85) (revised 1993).
125. 120 IAS 25, supra note 97.
126. IAS 32, supra note 98. See discussion of E62 infra notes 141-144 and accompanying text.
127. IAS 31, Financial Reporting of Interests In Joint Ventures (1.1.92) (revised 1990).
128. IAS 37, Provisions, Contingent Liabilities and Contingent Assets (1.7.99) (issued Sept. 1998 and effective for annual financial statements covering periods beginning on or after 1 July 1999).
129. IAS 10, Contingencies and Events Occurring after the Balance Sheet Date (1.1.80) (revised 1974). The portion of IAS 10 dealing with contingencies is being revised in the current IASC project on Provisions, Contingent Liabilities and Contingent Assets. The portion on subsequent events is being revised in a separate IASC project on that subject.
130. IAS 1, supra note 99.
131. IAS 22, supra note 95. Revision to IAS 22 was approved in principle by the Board in July 1998, subject to mail ballot on a final draft.
132. IAS 38, supra note 112.
133. IAS 7, Cash Flow Statements (1.1.79) (revised 1992).
134. IAS 27, Consolidated Financial Statements and Accounting for Investments in Subsidiaries (1.1.90) (revised 1988).
135. 130 IAS 21, supra note 119, and IAS 29, Financial Reporting in Hyper-inflationary Economies (1.1.90) (revised 1989).
136. IAS 28, Accounting for Investments in Associates (1.1.90) (revised 1988).
137. IAS 14, Segment Reporting (1.7.98) (revised in 1997 and effective for financial reporting periods beginning on or after 1 July 1998) (this replaced IAS 14, Reporting Financial Information by Segment, which remained effective until 1.7.98).
138. IAS 34, Interim Financial Reporting (1.1.99) (issued Feb. 1998 and effective for financial reporting periods beginning 1 Jan. 1999).
139. IAS 33, Earnings Per Share (1.1.98) (issued Feb. 1997 and effective for financial reporting periods beginning 1 Jan. 1998).
140. IAS 24, Related Party Disclosures (1.1.86) (revised 1984).
141. IAS 35, Discontinuing Operations (1.1.99) (issued June 1998 and effective for financial reporting periods beginning 1 Jan. 1999).
142. IASS, supra note 100.
143. IAS 8, Id.
144. The IASC Board recently voted to adopt revisions to IAS 22, Business Combinations, and IAS 38, Intangible Assets, in Sept. 1998. These revisions include the long-debated provisions relating to the treatment of goodwill.
145. See Springsteel, "All For One, Or None For All? International Accounting Standards," 14 Chief Financial Officer, No. 4, at 103 (Apr. 1998).
146. The exposure draft E62 does not include new provisions for the disclosure and presentation of financial instruments. These standards have already been approved by IASC. See IAS 32, Financial Instruments: Disclosures and Presentation (adopted Jan. 1996).
147. See FASB Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (June 1998) [hereinafter "SFAS 133"].
148. See Wipperfurth, "A Test of Wills: U.S. and International Rulemakers Seen Headed for A Showdown That May Well Decide The Fate of An International Accounting Standard," Investment Dealers' Digest, Aug. 31, 1998, at 14 (reviewing E62).
149. See generally Springsteel, supra note 140. See also IASC website, Current Projects, Financial Instruments, available at http://www.iasc.org.uk/frame/cen3_11.htm.
150. See generally Springsteel, supra note 140. See also IASC website, Current Projects, Financial Instruments, available at http://www.iasc.org.uk/frame/cen3_11.htm.
151. See Obstacles to Global Accounting, supra note 50.
152. Id.
153. See SEC International Accounting Report, supra note 45, at 17.
154. Id.
155. See, e.g., Remarks by Michael H. Sutton, Chief Accountant, Office of the Chief Accountant, U.S. Securities and Exchange Commission, International Harmonization of Accounting Standards: Perspectives from the Securities and Exchange Commission, before the American Accounting Association 1997 Annual Meeting, Dallas, Texas (Aug. 17, 1997).
156. See Remarks by Michael H. Sutton, Chief Accountant, U.S. Securities and Exchange Commission, The Role of Financial Reporting in U.S. Capital Markets, presented at New York University (Nov. 25, 1996).
157. IOSCO, Report of the Technical Committee, International Disclosure Standards for Cross?Border Offerings and Initial Listings by Foreign Issuers (1998) (International Disclosure Standards Report).
158. Id. at 3.
159. IOSCO Press Communiqué: "IOSCO Announces the Release of Four Documents of Vital Interest to Securities Regulators and Market Participants" (May 27, 1998).
160. International Disclosure Standards Report, supra note 151, at 3.
161. Id. at 3-4.
162. IOSCO Press Communiqué, supra note 153.
163. See Pacter, "International Accounting Standards: The World's Standards by 2002," 68 The CPA Journal, No. 7, at 14 (July 1998).
164. The IASC provides a list of many companies using IAS on its website: see http://www.iasc.org.uk/frame/cen1_7.htm (visited 19 Oct. 1998).
165. The IASC provides an updated list of countries accepting IAS, along with relevant reservations: see http://www.iasc.org.uk/frame/cen1_12.htm (visited 19 Oct. 1998).
166. See Gonzalez & Olive, "Foreign Issuer Disclosure and Accounting Compliance in U.S. Public Offerings and Securities Listings," 1 NAFTA Rev. 39 (1995) (comprehensive review of foreign issuer accounting and disclosure requirements).
167. Id. at 47-55 (reviewing Form 20-F requirements).
168. Id. at 61-71 (reviewing SEC approval of IAS).
169. See SEC International Accounting Report, supra note 45, at 21.
170. Id.
171. Contact Committee on the Accounting Directives, An Examination of the Conformity between the International Accounting Standards and the European Accounting Directives (Dec. 1996). See European Commission, "Accounting: Analysis Confirms Compatibility of E.U. and International Standards," Press Rel. IP/96/1132 (6 Dec. 1996).
172. See generally Pacter, supra note 157.
173. See SEC International Accounting Report, supra note 45, at 17.
174. See generally Obstacles to Global Accounting, supra note 50.
175. See generally Pacter, supra note 157.
176. Id.
177. Id.
178. See SEC Staff Report, supra note 5, ch. 4. At least as a partial result of this study, the SEC insists, in connection with financial statements used by foreign issuers, that assurances be provided that the auditing standards followed are the equivalent to U.S. generally accepted accounting standards (GAAS). Id. at IV-34. See generally Gonzalez & Olive, supra note 160.
179. See SEC Staff Report, supra note 5, ch. 4. At least as a partial result of this study, the SEC insists, in connection with financial statements used by foreign issuers, that assurances be provided that the auditing standards followed are the equivalent to U.S. generally accepted accounting standards (GAAS). Id. at IV-34. See generally Gonzalez & Olive, supra note 160.
180. Harmonizing Accounts Worldwide, supra note 6, at XII.
181. Reporting under these systems often leads to a lack of full transparency for investors due to their basis on the tax systems. Major countries in this category include France, Germany, and Japan. Id.
182. These countries generally have private sector mechanisms for setting accounting standards, usually within an overall statutory framework, and capital market pressures lead to the increased availability of information to investors. Major countries in this category include the U.S., the U.K., Australia, and the Netherlands. Id.
183. See generally Obstacles to Global Accounting, supra note 50; M. Roe, Strong Managers, Weak Owners (1994).
184. T. Evans, supra note 4, at 94. Cf. Cheney, "Western Accounting Arrives in Eastern Europe," 170 J. Accountancy 40 (Sept. 1990).
185. T. Evans, supra note 4, at 94. Cf. Cheney, "Western Accounting Arrives in Eastern Europe," 170 J. Accountancy 40 (Sept. 1990).
186. 178 T. Evans, supra note 4, at 95 (e.g., U.S., Canada, and the U.K.).
187. Id. (e.g., Japan, although this may be changing somewhat).
188. Note that the London Stock Exchange began accepting IASs soon after the foundation of IASC. See Harmonizing Accounts Worldwide, supra note 6, at XII. The U.S., Canada, and Japan, however, still refuse to permit the use of IASs for stock exchange purposes. Id.
189. See Gonzalez & Olive, supra note 160; "Accountants Gather Round Different Standards," in Survey ? Mastering Global Business, Fin. Times, Mar. 20, 1998, at 8, 12.
190. See Gonzalez & Olive, supra note 160; "Accountants Gather Round Different Standards," in Survey ? Mastering Global Business, Fin. Times, Mar. 20, 1998, at 8, 12.
191. See Obstacles to Global Accounting, supra note 50.
192. See E. Sherbert, Bridging the GAAP: Accounting Standards for Foreign SEC Registrants, at 7-10 (1994) (on file with Southern Methodist University School of Law), reprinted in Gonzalez & Olive, supra note 160 at 73 ANNEX (highlighting the Daimler-Benz accounting reconciliations).
193. See E. Sherbert, Bridging the GAAP: Accounting Standards for Foreign SEC Registrants, at 7-10 (1994) (on file with Southern Methodist University School of Law), reprinted in Gonzalez & Olive, supra note 160 at 73 ANNEX (highlighting the Daimler-Benz accounting reconciliations).
194. See Pacter, supra note 157.
195. See Springsteel, supra note 140.
196. See Obstacles to Global Accounting, supra note 50. Japanese accounting standards are set by the Ministry of Finance, which also has tax collection and macroeconomic policymaking responsibilities. Japan will likely not adopt IAS for domestic accounting purposes in the near future, given the current banking crisis and implementation of alleged arbitrary accounting practices to protect the banking system. See Pacter, supra note 157. See generally Hanna, "Initial Thoughts on Classifying the Major Japanese Business Entities Under the Check the Box Regulations," 51 SMU L. Rev. 75 (1997).
197. See Obstacles to Global Accounting, supra note 50. Japanese accounting standards are set by the Ministry of Finance, which also has tax collection and macroeconomic policymaking responsibilities. Japan will likely not adopt IAS for domestic accounting purposes in the near future, given the current banking crisis and implementation of alleged arbitrary accounting practices to protect the banking system. See Pacter, supra note 157. See generally Hanna, "Initial Thoughts on Classifying the Major Japanese Business Entities Under the Check the Box Regulations," 51 SMU L. Rev. 75 (1997).
198. See Obstacles to Global Accounting, supra note 50. Japanese accounting standards are set by the Ministry of Finance, which also has tax collection and macroeconomic policymaking responsibilities. Japan will likely not adopt IAS for domestic accounting purposes in the near future, given the current banking crisis and implementation of alleged arbitrary accounting practices to protect the banking system. See Pacter, supra note 157. See generally Hanna, "Initial Thoughts on Classifying the Major Japanese Business Entities Under the Check the Box Regulations," 51 SMU L. Rev. 75 (1997).
199. See Obstacles to Global Accounting, supra note 50.
200. See "Accounting Standards: America vs. the World," The Economist 58 (Jan. 17, 1998); Accountants Gather Round Different Standards, supra note 181.
201. See Pacter, supra note 157.
202. See Obstacles to Global Accounting, supra note 50.
203. See SEC International Accounting Report, supra note 45, at 17.
204. Id.
205. See Obstacles to Global Accounting, supra note 50.
206. See FASB, The IASC-U.S. Comparison Project: A Report on the Similarities and Differences between IASC Standards and U.S. GAAP (1998).
207. See Pacter, supra note 157.
208. See generally Bloomer, "International Accounting: A Comparison of IASC and U.S. GAAP Standards," 79 J. Lending Credit Risk Management No. 7, at 26 (Mar. 1997).
209. See SEC International Accounting Report, supra note 45, at 17.
210. See Obstacles to Global Accounting, supra note 50.
211. 199 See, e.g., Remarks by Jane B. Adams, Deputy Chief Accountant, Office of the Chief Accountant, U.S. Securities and Exchange Commission, at the 17th Annual SEC and Financial Reporting Institute Conference, Leventhal School of Accounting, University of Southern California, Los Angeles (May 14, 1998) (on file with the authors). These factors have been repeated on numerous occasions in SEC testimony and speeches since Apr. 1996, when the SEC released a statement in support of the efforts of IOSCO and the IASC. See SEC News Digest, SEC Statement Regarding International Accounting Standards, Issue 96-67, reprinted in 1996 SEC LEXIS 873 (Apr. 11, 1996).
212. 199 See, e.g., Remarks by Jane B. Adams, Deputy Chief Accountant, Office of the Chief Accountant, U.S. Securities and Exchange Commission, at the 17th Annual SEC and Financial Reporting Institute Conference, Leventhal School of Accounting, University of Southern California, Los Angeles (May 14, 1998) (on file with the authors). These factors have been repeated on numerous occasions in SEC testimony and speeches since Apr. 1996, when the SEC released a statement in support of the efforts of IOSCO and the IASC. See SEC News Digest, SEC Statement Regarding International Accounting Standards, Issue 96-67, reprinted in 1996 SEC LEXIS 873 (Apr. 11, 1996).
213. See, e.g., Remarks by Mary B. Tokar, Senior Associate Chief Accountant, Office of the Chief Accountant, U.S. Securities and Exchange Commission, at the 2nd Annual International Accounting Standards Conference, Belgium (Mar. 10, 1998) (on file with authors).
214. See SEC International Accounting Report, supra note 45, at 23.
215. See Tokar, supra note 200, at 5.
216. See "A Window of Opportunity," Corp. Accounting Int'l 10 (Apr. 1996).
217. Fourth Company Law Directive, 78/660/EEC; Seventh Company Law Directive on Consolidated Accounts, 83/349/EEC; Directives on the Annual Accounts and Consolidated Accounts of Banks, 86/63 5/EEC, and Insurance Companies, 91/674/EEC.
218. 27 O.J. (No. L 126) 20 (1984).
219. Id.
220. European Commission, Green Paper: The Role, the Position and the Liability of the Statutory Auditor within the European Union (July 1996).
221. See "UK: Catching the Audit Train or Missing it by Miles?" Accountancy, 31 Jan. 1997.
222. European Commission, "Accounting: New European Approach on Statutory Auditing to be Launched," Press Rel. IP/96/1134, Rapid, 9 Dec. 1996.
223. Green Paper, supra note 207.
224. Monti speech, supra note 39.
225. European Commission, The Statutory Audit in the European Union: The Way Forward, Communication of the Commission (May 1998).
226. See the IFAC website at http://www.ifac.org for details.
227. See Preface to International Auditing Guidelines of the International Federation of Accountants, AICPA Professional Standards, § 8000.01-02 (July 1, 1979).
228. IFAC, Bound Volume: International Standards on Auditing - Codified (1998).
229. See Oliverio & Newman, "Accounting in the Global Business Environment," 12 CPA J. 52 (Dec. 1997).
230. IFAC/IAPC, Exposure Draft: Reporting on the Credibility of Information (1998).
231. IOSCO, Objectives and Principles of Securities Regulation (1998).
232. Id. at 6-8.
233. Id. at 9 Annexure 3 (listing areas of implementation necessary as a precondition).
234. Recent work by the Basle Committee on Banking Supervision has also highlighted the importance of accounting standards for the regulation and supervision of credit institutions. See Core Principles of Effective Banking Supervision (Sept. 1997) (Principle 21: banks must maintain and publish fair and accurate financial statements in accordance with consistent accounting policies, "preferably of an internationally accepted standard"); Consultative Paper: Sound Practices for Loan Accounting, Credit Risk Disclosure and Related Matters (Oct. 1998) (presenting 25 principles for bank accounting).
235. IOSCO Principles, supra note 218, Principle 14.
236. Id. Principle 15.
237. Id. Principle 16.
238. See Group of Ten (G-10), "A Strategy for the Formulation, Adoption and Implementation of Sound Principles and Practices to Strengthen Financial Systems," Report of the Group of Ten (G-10) Working Party on Financial Stability in Emerging Markets, Financial Stability in Emerging Market Economies (1997).
239. See EBRD, Sound Business Standards and Corporate Practices: A Set of Guidelines (1997) (available at http://www.ebrd.com).
240. See EBRD, Transition Report 1998, (1998), ch. 6. See also J. Norton & M. Andenas (eds.), Secured Transactions in Emerging Markets (1998).
241. See EBRD, Transition Report 1998, (1998), ch. 6. See also J. Norton & M. Andenas (eds.), Secured Transactions in Emerging Markets (1998).
242. See Lastra, "Recent Developments in International Financial Regulatory Cooperation," in Yearbook of International Financial Economic Law - 1996 405, 406 (J. Norton ed. 1998).
243. According to the G-7: We call upon: . . . the IASC to finalize by early 1999 a proposal for a full range of internationally agreed accounting standards. IOSCO, IAIS, and the Basle Committee should complete a timely review of these standards. .. . We commit ourselves to endeavour to ensure that private sector institutions in our countries comply with these principles, standards and codes of best practice. G-7, Declaration of G7 Finance Ministers and Central Bank Governors (Oct. 30, 1998).