Step up your game at the global stage, IASB Chief tells India

India needs to step up its game in playing an influential role in global accounting standard setting process, Hans Hoogervorst, Chairman, IASB has said.

To have an influential voice at the IASB, India will also have to focus energies on institution building for standard setting capabilities and develop human capital.

For the kind of economic and political weight that it enjoys, India has not made the desirable impact at the global stage when it came to accounting standard setting, Hoogervorst told Business Line in an interview at Mumbai.

During his latest India visit, Hoogervorst met up with Reserve Bank of India (RBI) Governor Raghuram Rajan besides addressing the first edition of KPMG IFRS Conference.

The IASB Chief said India could influence standard setting at an early stage if it were to have a board member at the International Accounting Standards Board (IASB) or participate in its Accounting Standards Advisory Forum.

Currently, the IASB Board or its Advisory Forum has no representation from India, Hoogervorst said.

“Nobody has guaranteed seats in these boards. So I will not promise permanent seats for India. I do however think on a regular basis India should be on both of them (board and advisory forum) or at least one of these boards”.

Being in an important position in the IASB’s governance structure will help India influence standard setting at an early stage itself, Hoogervorst said.

PLEDGE FOR IFRS

A clear commitment to International Financial Reporting Standards (IFRS)—which is being considered by IASB as leading example of global standards—will be extremely helpful, the IASB Chief said.

India’s full transition to IFRS is a decision that only India itself can take, but IASB intends to make it as easy as possible, he added.

OUTSOURCING

India is staring at a huge economic opportunity if it were to get its nearly 2.5 lakh strong accountant community skilled in IFRS, he said.

“It could be the mother of all outsourcing opportunities”. There is a need for Institution building in India for more standard setting capabilities.

“Look at the future. Make people ready with technical abilities. It will be useful if you build internal institutional capacity in accounting that delivers intellectual leadership”, Hoogervorst suggested.

KPMG VIEW

Jamil Khatri, who is KPMG’s Global Head of Accounting Advisory Services, pointed out that IASB was getting increasingly responsive to local issues.

A case in point was IASB solving Asian issues such as accounting for bearer plants and residential construction.

“As India gets engaged in the process (IFRS convergence), some of India specific issues can come up to the table in a more structured manner”, he said.

This could happen if India were to strive for a board presence in IASB or participate in its accounting standards advisory forum.

BHAVE VIEW

Echoing Hoogervorst’s view, former SEBI Chairman C B Bhave said India – in the global give and take - is not giving enough in terms of ideas, because it is not at the (discussion) table.

“India is not at the table, because it is not prepared to say that I am fully into this (IFRS), and I want to be part of the international standards”, Bhave told Business Line.

The first step for India should be to convey that it is going to accept international standards.

“International investors will understand that it will not happen overnight nor will it happen for everybody. But we must show the commitment. It will be beneficial for our accountancy profession”, he said.

When foreign companies set up shop here, they are going to employ Indians skilled in IFRS to work out their accounts to comply with their reporting standards. “It will be a win-win for both”.

srivats.kr@thehindu.co.in

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