Who should set accounting standards?

As I feared the setting of accounting standards in the US has now become a part of the political process with a request from Representative Spencer Bachus to review the actions of the SEC, FASB and PCAOB and "receive testimony from those most affected by the FASB's actions" on the basis that "questions remain as to the ultimate effectiveness of the fair value accounting revisions".

I am not sure how anyone can comment of the effectiveness of revisions that were only introduced a few weeks ago; but I am even more concerned that political pressure should potentially be determining accounting standards.

The IASB was heavily criticised at the end of last year for appearing to respond to political pressure.  The US has also criticised the governance of the IASB as not being sufficiently independent and potentially too susceptible to political pressure.  I don't know how this is consistent with the political pressure being put on FASB nor how this pressure on FASB will assist in the aim of achieveing greater cooperation between the world's leading accounting standard setters (ie IASB & FASB) in order to get one, global, high quality set of accounting standards.

The current situation is not encouraging.

 Standards & Regulators  3 Comments May 3rd, 2009