UK's business accounting regime comes under fire

27/August/2010

The Accounting Standards Board (ASB) may face opposition in its attempts to extend the use of International Financial Reporting Standards (IFRS) to small and medium-sized businesses (SMEs).

Public listed companies are already subject to converged financial reporting, but the body is keen to subject all UK firms to the standards.

However, concerns have been raised about the ASB's interpretation of IFRS in the UK, with critics accusing the organisation of missing the point.

Tim Bush, a member of the Urgent Issues Task Force, which has reviewed the ASB's plan for IFRS in the SME sector, claimed last week that there is a "regulatory fiasco" in UK financial reporting.

In a letter to the Department for Business, Innovation and Skills (BIS), he claimed that the ASB has implemented a flawed IFRS regime which differs to that seen across the rest of Europe.

And according to BIS, the accountant's view on UK financial reporting is shared by a number of other parties, who have also made their feelings known.

A spokesperson for the department commented: "We can confirm BIS has received the letter from Tim Bush and we have noted his analysis of the impact of IFRS during the credit crisis.

"Mr Bush is not alone in expressing these concerns either in the UK or internationally."

Speaking to the Daily Telegraph, which initially broke the news, ASB chairman Ian Mackintosh described the claims as being "simply wrong".

"The ASB is made up of eminent and experienced professionals and it is both consultative and responsive to market need," he stated.

Whether or not the government commits to a full review on the implementation of accounting standards remains to be seen, but small business owners will no doubt be monitoring the situation with interest.

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