Shift towards principle-based standards needed

News Article - 24 May 2012
Category:

The head of accounting and auditing policy at the Financial Services Authority has warned that principle-based standards could fall by the wayside if the lean towards rule-based standards continues.

Speaking at a PricewaterhouseCoopers conference, Richard Thorpe urged companies to be clear about the standards they use because different outcomes were possible, according to Accountancy magazine.

Mr Thorpe suggested that a trend towards rule-centred International Financial Reporting Standards rather than principle based IFRS could inhibit companies working within "standards that are capable of consistent application, interpretation and enforcement".

Furthermore, Mr Thorpe added that despite a number of problems encountered by regulators following the implementation of the standards, the International Financial Reporting Interpretations Committee, which monitors how IFRS are interpretated, had not published any details on issues of rejection because it believes no further clarification is required.

News comes as New York's mayor Michael Bloomberg says that the city could lose its financial market status through "over-regulation, frivolous litigation and incompatible accounting standards", reports the Guardian.

Article keywords:

---

More industry news

• Think tank warns UK may have already slipped back into recession
• Growing demand for HR staff in technology and international sectors
• Boosting business growth a ‘priority’ to avoid Eurozone slowdown
• HMRC launches alternative disputes pilot scheme this week
• December employment statistics disregard gloomy recruitment predictions
• Eurozone manufacturing PMI shows modest improvement
• UK scores highly for economic governance by ratings agency
• Government launches two-year project focusing on manufacturing sector
• Burden of regulation on UK businesses ‘too high’

Back to news home page »