Enhancement of IASB quality control procedures
- Saskia Slomp
As numerous stakeholders, EFRAG praises the IASB's standard-setting process and dedication of the IFRS Foundation teams to deliver high quality financial reporting standards.
Despite those efforts, difficulties of interpretation and implementation may arise once an IFRS has been released. With the implementation of the Transition Resource Group on Revenue Recognition, the IASB is showing a strong willingness to best assist implementation efforts by practitioners. However, EFRAG believes that amendments and clarifications that may appear necessary when implementation efforts begin, should benefit from a lighter due process than that imposed for any amendment to IFRS, so as to allow for the appropriate level of responsiveness by the IASB in lifting uncertainties or undetected operational difficulties in applying the new standard.
A draft letter to the IASB and invitation to comment were published on June 2014.
EFRAG's public consultation seeking the views of our constituents on the IASB quality control procedures ended on 15 August 2014.
Our constituents agreed that, despite the IASB's high quality standard-setting process, some IASB publications issued cause difficulties of interpretation and implementation,n which lead to high implementation costs and divergence in the application of IFRS.
EFRAG has therefore been encouraged by an important number of our constituents, notably by those that are not included in the IASB's restricted fatal flaw reviews, to renew our recommendation that public fatal flaw reviews take place rather than thinking of another possible post-publication light, due process stage.
On 30 September 2014, EFRAG issued a letter to the IASB, calling on the IASB that a public fatal flaw review be included as a formal step in the IASB due process, including discussion of the fatal flaw results in a public meeting of the IASB, based on a public summary report of these results before the final text of the standard is approved by the IASB.
EFRAG's Feedback Statement
On 29 October 2014, EFRAG issued a feedback statement summarising the comments received from EFRAG's public consultation and how those comments were considered by EFRAG's Supervisory Board in its discussions on its letter to the IASB.