International Financial Reporting Standards Foundation
The Structure of the International Financial Reporting Standards Foundation
The international financial reporting standards foundation is a big and independent organization, which is not profit-oriented and works in the interest of the public. The main objectives of the foundation are to develop comprehendible, enforceable, and worldwide standards in international reporting about financial matters, which are of high quality, to aid in the use and application of the established financial standards, accounting of coming up economies in the medium size and small-scale categories. Kirk (2008, pp.43) states that “IFRS ensures enormous quality solutions through integrating national and IFRS’s accounting standards.” The IFRS has a well hierarchal structure composed of: the monitoring board, the trustees of the IFRS foundation international accounting standards board (IASB) and IFRS international committee, the advisory council, and the operations unit.
The Monitoring Board
The monitoring board is the top unit in the IFRS structure hierarchical order dealing with monitoring of capital markets for public authorities. The major responsibilities of this board are to make sure that all the trustees of the IFRS foundation perform their duties according to the stipulations in the organization’s constitution, appointment, and reappointment approval of all trustees. Knorr (2010, pp.143) states, the board “…is responsible for organizing meetings with the trustees once in a year or when deemed appropriate.” However, financial maintenance is the work of the trustees of IFRS.
The Trustees of IFRS Foundation
The trustees of IFRS foundations tackle many functions including establishing and ensuring proper maintenance of all financial arrangements within the organization, coming up or amending the operating protocols of all the trustees, determining the legal framework of which the IFRS Foundation should operate, dealing with governance issues in addition to appointing or informing the IFRS advisory council. It also looks at reviews, selection, finance, and effectiveness of the standards-setting organ that is composed of the international accounting standards board (IASB) and IFRS international committee.
The International Accounting Standards Board
This board, established in 2001 and with headquarters in London, is composed of 16 members, 13 serving full time and a minimum of 3 on part-time. “It performs many functions on behalf of IFRS foundation including the development of reporting standards for international accounting and financial matters as well as promotion of the application of the set standard” (Kirk, 2008, pp.56). It is also responsible for approving interpretations advanced by the international accounting report interpretations committee.
The International Financial Reporting Standards Interpretations Committee
This committee, which encompasses 14 members, deals with coming up with standards relating to the establishment and determination of the possibility of a lease containing arrangements. It also checks liabilities accruing from involvement in particular markets, share transaction standards for groups and treasuries, programs for customer loyalties, standards for agreements on construction of buildings such as real estates, and standards for or distribution of nonmonetary properties to the owners. Further responsibilities that are placed within this committee mandate include drafting of interpretations to gather the public responses before preparing the final interpretation and reporting and submission of it upon which its approval is granted by the board on receiving it.
The International Financial Reporting Standards Advisory Council
This council has at least 30 members as stipulated by their constitution. The organization trustees and works carefully select members for three years period although the tenure is renewable. The advisory council performs various functions like providing individuals and various organizations, which have an interest in reporting about financial matters with forums. The forums help them participate in these matters geared towards providing information to the IASB on projects involving standard-setting, giving direction to trustees, giving advice to the IASB on priorities at its work, and on the decision-making process.
Kirk, R., 2008. IFRS: A Quick Reference Guide. London: CIMA Publishers.
Knorr, A., 2010. Practical Implementation Guide and Workbook. San Francisco: Wiley Publishers.