World’s leading accounting bodies call for global debate

The Global Accounting Alliance (GAA), a group of the world’s leading professional accounting bodies, has concluded that there is a need for a global debate on how to reduce complexity in financial reporting and how to accelerate the move towards principles-based financial reporting standards (IFRS). It notes that a financial reporting environment which emphasizes professional judgment, rather than adherence to a rulebook, would allow preparers and auditors to focus on the true economic substance of financial transactions. The GAA report, Getting to the heart of the issue – Can financial reporting be made simpler and more useful? draws on interviews conducted with financial regulators from the UK, Canada, Australia, China, the United States of America, South Africa, France, the European Commission and international regulators. Interviewees also included a leading US litigation lawyer and representatives of the world’s leading accounting and auditing practices.