New book by Jones School’s Zeff studies formation of global accounting standards

From 2001 to 2011, the International Accounting Standards Board (IASB) and its International Financial Reporting Standards (IFRS) acquired a central position in the practice and regulation of financial reporting around the world. A new book co-authored by Rice’s Stephen Zeff and Dutch accounting professor Kees Camfferman explores and chronicles the board’s rise to prominence, which has been accompanied by vivid political debates about its governance and accountability.

STEPHEN ZEFF

“Aiming for Global Accounting Standards: The International Accounting Standards Board, 2001-2011” was commissioned by the IFRS Foundation, the oversight body of the board, and will be published this month by Oxford University Press USA. The 662-page book should help practitioners, policymakers, researchers and educators form a deeper understanding of the people, forces and events that have shaped the IFRS, said Zeff, the Keith Anderson Professor in Business at Rice’s Jones Graduate School of Business.

“The significance of the IASB is that it sets accounting standards for publicly traded companies — that is, those listed on stock exchanges — in most countries of the world except the United States, which means that it decides how companies are to measure and report their profitability and the amounts at which their assets and liabilities appear in their balance sheets,” Zeff said. A leading expert in the history of financial reporting, Zeff is the past president of the American Accounting Association and a member of the U.K. Financial Reporting Council’s academic panel.

The IASB’s work in setting standards for financial reporting has at times made it the center of controversies, Zeff said. A private-sector body based in London, the board sets standards with legal force in a great many jurisdictions. This can make it the target of political or corporate influence, especially in times of financial stress such as the global economic crisis of 2007-09, Zeff said.

The book resulted from six years of extensive research, writing and more than 170 interviews conducted around the world with high-level government officials and corporate financial executives — from the U.S. to nine European countries and to Hong Kong, China, Japan, Australia and New Zealand. Among those interviewed was leading American economist Paul Volcker, the former chairman of the Federal Reserve who was the first chairman of the IFRS Foundation.

Zeff and Camfferman trace the history of the IASB from its foundation as successor to the International Accounting Standards Committee and discuss its operation, changing membership and leadership, the development of its standards and their reception in jurisdictions around the world.

“The major countries that require their listed companies to adopt all, or virtually all, of the IASB’s accounting standards are all 28 countries in the European Union, Norway, Canada, Hong Kong, China, South Korea, Australia, Brazil, Argentina, Chile, Mexico and South Africa and a great many developing countries,” Zeff said. “In Japan, some 50 companies have so far voluntarily adopted the board’s standards. The World Bank and the U.S. Securities and Exchange Commission have been strong supporters of the IASB since the beginning.”

This is the third book Zeff and Camfferman have co-authored. In 2007 they published a history of the IASB’s predecessor body titled “Financial Reporting and Global Capital Markets: A History of the International Accounting Standards Committee, 1973-2000.” In 1992 they published “Company Financial Reporting: A Historical and Comparative Study of the Dutch Regulatory Process.”