* IASB proposes new 12-member advisory body
* National groups want bigger body, stronger say
By Huw Jones
LONDON, Nov 1 (Reuters) - The world’s top accounting rulesetter unveiled plans on Thursday aimed at buttressing its authority and independence in the face of calls from European groups for a greater say in how new standards are shaped.
The International Accounting Standards Board (IASB) writes rules used in over 100 countries, giving it clout that critics say calls for much greater accountability.
Accounting standards setting has become politically charged since the financial crisis, as policymakers realise the reach that rules can have - such as making banks recognise losses earlier in future, before taxpayer bailouts are needed.
The IASB proposed on Thursday an Accounting Standards Advisory Forum comprising 12 members from across the world.
The board currently relies on informal, bilateral contacts with scores of national accounting bodies for input into writing new rules but this has become unwieldy.
“The answer is to establish a multilateral forum where representatives of the standard-setting community can come together with the IASB,” said IASB Chairman Hans Hoogervorst.
But what appears to be a modest piece of housekeeping has already stirred political tensions, not least in Europe, the region that gave IASB rules global momentum and now feels it should have strong representation.
Hoogervorst proposes giving Europe three seats, the same as for the Americas and for Asia-Oceania. It would meet for just a day and a half, four times a year in London and, crucially, be chaired by the IASB.
Members would have to sign up to promoting a single set of global standards - code for no lobbying for national carve-outs - and respect the IASB’s independence.
The IASB plan is in effect an opening gambit as national standard setters have already filed a counter proposal to the IASB that proposes a board with up to 20 seats and far greater parity between the IASB and national standard setters.
“Our proposal is more comprehensive, precise, focused on the objective of partnership at all stages, not just a forum controlled by IASB staff,” said Jerome Haas, president of the French accounting standards board ANC.
“We will have to work to find the right balance and organisation based on the two proposals,” Haas told Reuters.
The counter proposal envisages rulemaking as more of a bottom up process based on evidence and need, rather than being imposed by the IASB after some local consultation.
The IASB has also been locked in joint talks with the accounting standards board from the United States, which still uses its own rules, for a decade to align each others’ rules.
But in a blow to the IASB, the United States has deferred a decision on whether to switch to IASB rules.
Some national accounting bodies from Europe and elsewhere now say it’s time for some of their demands to be more fully heard after keeping quiet for years, not wanting to upset the Americans. (Editing by Mark Potter)