International accounting is developed through world-wide organizations that backed by organizations of the same weight have wanted, through the issuance of accounting standards, to give them a direction towards uniformity but above all towards the "high quality" of accounting information, The IASB (International Accounting Standard Board) is a clear example within the development of international accounting, an organization that has undergone several transformations of an ideological and structural nature that in a certain way have strengthened it to face the new demands of large economies.
1. Historical Review
Within the process of what we currently know as globalization of the economy, there are a series of drawbacks with accounting information; since there are economies of each country, under a specific and totally different context that makes it difficult to issue and understand them.
Due to this, there is an internationalization of accounting in the hands of international organizations that seek a support that justifies the uniform issuance of Financial Statements, in order to satisfy all the financial and accounting needs that are present today and that they were totally away from the reality of some years ago.
In accordance with this, on June 29, 1973 a Committee called the IASC (International Accounting Standards Committee) was created, which was created as a professional body, that is to say private and worldwide, through “An agreement made by professional organizations from nine countries such as Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom, Ireland and the United States.
One of its fundamental objectives, expressly stated in its constitution, was "to formulate and publish, in the public interest, accounting standards that are observed in the presentation of the Financial Statements, as well as to promote their acceptance and observance throughout the world."
In 1981, the IASC and IFAC agreed that the IASC would have full and complete autonomy in issuing the IAS and publishing and discussing documents that refer to international accounting, in the same way that all IFAC members became IASC members.
In 2000 the IASC rethought its objectives, focusing on the privilege of information for participants in the capital market, in the search for clear, transparent and comparable financial information, allowing decision-making to the different agents involved, this was largely due to problems that arose with some companies where their financial statements did not accurately reflect their financial situation, an example of this was what happened with the telecommunications company in the US.
According to this rethinking on April 1, 2001 the IASB was born, this is a private organization based in London, which reports to the (International Accounting Committee Foundation). In the course of the transformation of the IASC by the IASB, changes in its structure arose where the IASB decided to adopt as standards those issued by the IASC (NIC), until they are modified or reformulated. The IAS change their name to International Financial Reporting Standards (IFRS), in Spanish they are called International Financial Reporting Standards (IFRS).
2. Objectives of the IASB
Establish a unique set of high-quality global accounting standards.
Promote the use and rigorous application of such standards.
Actively work with national standard setters to achieve the convergence of national accounting standards and IFRS, towards high quality solutions.
Require that transactions and events of a similar nature be accounted for and reported on in a similar way.
It should be noted that the IASB achieves its objectives primarily through the development and publication of IFRS.
3. Functions
Issue IFRS, which will be previously published, to be understood, analyzed and modified if applicable.
Analyze the different environments where IFRS can be applied and developed.
Total discretion in the technical agenda and its projects.
4. Responsibilities
Due approval of IFRS.
The approval of documents, such as the conceptual framework for the preparation and presentation of the Financial Statements.
And draft standards and other discussion papers.
The IFRIC in 2002 replaces the previous Standing Interpretations Committee (SIC), has the role of reviewing and issuing IFRS interpretations for approval by the IASB and, within the context of the Conceptual Framework, providing timely guidelines on information problems financial not included in IFRS.
The SAC advises the IASB on its agenda and priorities, informs the views of the organizations on the Council on standard-setting projects, advising the IASB and the trustees.
IFRS apply to all general purpose financial statements. Such financial statements are aimed at meeting the common information needs of a wide spectrum of users.
5. Structure
The IASC Foundation is an independent organization that has two main bodies, the Trustees and the IASB; as well as an Advisory Council (Standards Advisory Counsil - SAC) and an Interpretation Committee (International Financial Reporting interpretations Commitee - IFRIC).
The trustees of the IASC Foundation appoint the members of the IASB, monitor their work and obtain the necessary funds for the operation of the entity, while the IASB has the sole responsibility for issuing accounting standards.
The IFRIC, formerly the Standing Interptretations Committee (SIC), reviews and issues interpretations of the IFRS and the IASB Conceptual Framework that presents unacceptable and ambiguous treatments with the aim of achieving consensus in the accounting management of these.
The SAC advises the IASB on its agenda and priorities, informs the views of the organizations on the Council on standard-setting projects, advising the IASB and the trustees.
6. Process of Elaboration of a Standard
In accordance with the IASC methodology, the process of developing a standard involved the following steps:
1. The council establishes a special committee.
2. The special committee identifies and reviews all accounting problems associated with the chosen topic and considers the conceptual framework. For the resolution of such problems, once the considerations are taken, the committee can send a summary of the point to the IASC council.
3. After receiving comments from the council on the summary of the item, if any, the special committee prepares and publishes a draft statement or other discussion document… interested parties are invited to submit comments, within a period public discussion that can be 3 months.
4. The special committee reviews the comments received on the draft declaration of principles, it is referred to the council for approval and use as a basis for the preparation of an IAS project.
5. The special committee prepares a draft draft standard for approval by the council. Approval is achieved with two thirds of the council, this draft standard will be submitted to public discussion for one to three months.
6. The special committee, reviews the comments and prepares a draft IAS, which is reviewed by the council and achieves approval with at least 3 quarters of the council, and the final standard is then published.
7. Impact of the IASB on IFRS in the Accounting Area
1. The fact that there are different measurement bases within the conceptual framework, generates some setbacks against one of the qualitative characteristics that financial statements must possess, known as comparability, since the fact of having the freedom to take any of these bases to measure the information, it makes that at the moment of comparing the Financial Statements the uniformity in the information is lost because different criteria were taken for its due measurement.
Another important aspect is the fact that IFRS allow an entity to measure certain elements of the information, which leads to different valuation practices. All this together with the criteria and policies of each company makes the comparability process difficult.
2. Taking into account that it is essential for any company to have the current regulations that will govern it in the accounting part, it is essential that all measures be taken to be on par with international standards and adapted to national regulations; although there are entities at the national level that present the information in the form of segments and that are outside the accounting information since it is too expensive to implement an appropriate accounting system and at the request of users to the entity that requests the information at intermediate times.
In the near future we can count that we all speak a single language for accounting purposes and “a single standard for preparing financial statements and detailed guidelines for certain transactions or accounts turns out to be more effective and efficient in the result. The greatest cost or effort in its adoption is mainly concentrated in the year of the change ”
3. The IASB issues its standards under the parameters of the conceptual framework, and in turn said framework must be supported by the General Theory. According to Mauricio Gómez Villegas, Public Accountant, 2003 Nobel Prize in Accounting Research Professor and member of the C-Five, the approach to international accounting regulation must be evaluated in light of the Theory of accounting and control and concludes by stating that the approach of international accounting regulation, takes a limited and highly simplified view of the role of information, exacerbating the objective of the valuation, and ignores the capacity and functions of accounting as a structure and process for the consolidation of internal and external control archetypes to organizations.
The great problem lies in the fact that the IASC (today the IASB) in its three decades of development, deepens with the permanent adjustments and transformations to the international architecture without taking into account whether said transformations would benefit all economic entities in all economies.
Conclusions
International accounting is what has given rise to the IASC and its transformation into what we now know as the IASB, an international organization with the strength of being among the largest organizations of "globalized" accounting, but when it comes to accounting At the international level, we are talking about a globalized economy that prevails under the regime of large transnational companies, where the accounting sense is parameterized by the capital markets.
But what happens then with other companies, the IASB then faces a series of obstacles that prevent the application of its standards from being done uniformly for them and from not providing high-quality information.
The truth of the case is that from now on a series of processes awaits this body that will mark the development of international accounting, its importance should not be ignored but governments must also be prepared with the provisions and rethinking that they propose to the accounting and presentation of financial statements.
Bibliography
MEJIA SOTO, EUTIMIO; MONTES, CARLOS ALBERTO; MONTILLA, OMAR OF JESUS. IAS International Accounting Standards, IFRS International Financial Reporting Standards. International Accounting, 2nd Edition, ECOE editions.
IASB official website, www.iasb.com.uk
MARTÍNEZ GARCÍA, FRANCISCO; FERNÁNDEZ, FRANCISCO. The Tacit Reserves of the IFRS valuation model: The path to comparability ?. International Journal of Accounting and Auditing Legis.
TECHNICAL COUNCIL OF THE PUBLIC ACCOUNTING. Presentation of Financial Information. International Journal of Accounting and Auditing Legis No. 27.
VILLEGAS GÓMEZ, MAURICIO. Evaluation of the IFRS Approach from Accounting and Control Theory. International Journal of Accounting and Auditing Legis No. 25.
Mejia, Eutimio; Montes, Carlos Alberto; Montilla, Omar de Jesús. IAS International Accounting Standards, IFRS International Financial Reporting Standards. International Accounting, 2nd Edition, ECOE editions. pp 87-89.
Excerpted from the official page of the IASB, www.iasb.com.uk, at this moment 41 NICs and 7 IFRS have been issued.
Taken from the official IASB website, www.iasb.com.uk, the chart represents the IASB structure in its original form without any translation.
Mejia, Eutimio; Montes, Carlos Alberto; Montilla, Omar de Jesús. IAS International Accounting Standards, IFRS International Financial Reporting Standards. International Accounting, 2nd Edition, ECOE editions. pp 84-85
Martínez García, Francisco; Fernández, Francisco. The Tacit Reserves of the IFRS valuation model: The path to comparability ?. International Journal of Accounting and Auditing Legis No. 25, pp 61.
Technical Council of Public Accounting. Presentation of Financial Information. International Journal of Accounting and Auditing Legis No. 27, pp 186
Villegas Gómez, Mauricio. Evaluation of IFRS Approach from Accounting and Control Theory. International Journal of Accounting and Auditing Legis No. 25, pp 61.
Objectives of the IASB, excerpted from the Official website, www.iasb.com.uk.
