Financial crisis group makes recommendations

News release
29 July 2009

International financial crisis group makes recommendations

The Financial Crisis Advisory Group (FCAG), of which the New Zealand Securities Commission Chairman Jane Diplock is a member, has published its recommendations relating to financial reporting and standards setting.

The group was set up in December 2008 by the International Accounting Standards Board and the United States Financial Accounting Standards Board to advise the boards about standards setting implications of the global financial crisis and potential changes to the global regulatory environment.

“The report highlights the importance to financial stability of high quality accounting standards, faithfully applied with rigorous independent audit. This is critical to restoring market confidence and ensuring economic growth,” Ms Diplock says.

“While accounting practices were not a main cause of the financial crisis, they have an important part to play in the recovery,”

“Because of the global nature of financial markets, the report emphasises the need for a uniform set of internationally recognised accounting standards. It urges all countries to adopt or converge with the International Financial Reporting Standards (IFRS), which New Zealand has already adopted.”

The report sets out four principles for standards setting: effective financial reporting, limitations of financial reporting, convergence of accounting standards and standards-setter independence and accountability.

The group includes recognised international leaders from the fields of business, standards setting and regulation. Jane Diplock, also the chair of the Executive Committee of the International Organization of Securities Commissions, is the only representative from Australasia.

The group will meet in December to review progress made on its recommendations.

The report is available on www.iasb.org

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