The regulatory perspective
An address by David Knott, Chairman, ASIC, to the International Accounting Standards Board World Standard Setters' conference, Hong Kong, 18 November 2002.
The case for International Accounting Standards Until relatively recently we might have started this discussion by debating the case for international accounting standards. That debate is now redundant. The much more relevant questions now are what do we want out of these standards and what expectations of them might we reasonably hold? These questions lead to considerations that are in part technical (going to content and style), part political (involving both domestic and geo-political interests) and part social (involving a variety of national policy objectives, including regulatory objectives).
We all knew prior to ENRON that the increasing pace of international capital mobility was making uniform cross-border accounting standards ever more important. We knew that Europe would have to embrace that initiative in order to maintain the momentum of its trading block aspirations. Indeed, as early as 1993, the International Organization of Securities Commissions (IOSCO), in response to growth in crossborder capital flows, commenced the process of endorsing core standards of the IASC for use in cross-border listings and offerings.
But there can be little doubt that ENRON and other recent corporate failures in the United States have profoundly influenced the degree of engagement by that country – and by others – in the drive towards harmonized international standards. This is why I will not dwell too much on the rationale for harmonization, but move quickly to other issues.