Plea for a single system of international accounting
Paris, 15 May 2000 - A group of business leaders today called for a single international accounting system to improve transparency and quality of financial information.
They would like to see convergence of the two systems currently used by companies in the industrialized world - International Accounting Standards (IAS) and the United States' Generally Accepted Accounting Principles (USGAAP).
But the three members of the Presidency of the International Chamber of Commerce added that if convergence proved impossible, agreement should be sought on mutual recognition of the two accounting systems.
They said that globalization of business investment and capital markets had increased the need for high quality financial information. "It is widely agreed, for example, that doubts about the reliability of corporate financial statements in some countries contributed to the breadth and depth of recent financ
ial crises affecting Asia, Latin America and Russia." It would be difficult to convince emerging economies to opt for international rules if the two major economic blocs could not agree on common basic rules.
President Adnan Kassar of the International Chamber of Commerce, and the other two members of world business organization's Presidency, Richard D McCormick and Helmut O Maucher, said there was "a substantial gap" between the quality of the financial information available in many countries and the reasonable expectations of users of this information.
"Closing the gap should be a priority issue for all actions in the international financial marketplace - buyers, sellers, investors, lenders, borrowers, regulators, finance ministries and central banks.
"Success would mean, not only improved transparency and greater comparability and reliability of financial information, but also very likely a reduction in the cost of capital and diminished burdens on business."
The Presidency statement added: "ICC therefore calls for the changes necessary at national and international levels so that all general-purpose financial information may be prepared according to a single worldwide framework using common measurement criteria and requiring fair and comprehensive disclosure."
The framework must provide users with a transparent representation of the underlying economics of transactions and must be applied "rigorously and consistently", the statement said.
It described IAS as a success story in international business self-regulation, which was being adopted or used as a benchmark for national standards by growing numbers of developing and transition economies.
The European Union was moving towards IAS as a common base for the member states and the United States was discussing eventual convergence between international and national standards, the ICC Presidency statement noted.
ICC Statement on Improving the Quality of Financial Information
Financial Service and Insurance