Standards Advisory Council (IFRS Advisory Council)

Definition

The Standards Advisory Council (SAC), now known as the International Financial Reporting Standards (IFRS) Advisory Council, is a body that advises the International Accounting Standards Board (IASB) on key priorities and strategic issues in the standard-setting process. The Council includes representatives from diverse geographical areas and professional backgrounds, ensuring comprehensive input on financial reporting standards.

Examples

Advisory Role on Standards: The IFRS Advisory Council provides guidance to the IASB on major projects such as revenue recognition, lease accounting, and financial instruments.
Global Representation: Members include national standard-setters, regulators, financial institutions, and other organizations. For instance, the Council recently included representatives from the European Commission, the U.S. Securities and Exchange Commission (SEC), and the International Organization of Securities Commissions (IOSCO).
Strategic Initiatives: The Council advises the IASB on the adoption and implementation of IFRS across different jurisdictions. An example is the ongoing support and guidance for IFRS adoption in emerging markets.

Frequently Asked Questions

What is the purpose of the IFRS Advisory Council?

The primary purpose of the IFRS Advisory Council is to advise the IASB and the Trustees on strategic issues, including the priorities of the IASB’s work program, the IASB’s agenda, and the interaction of the IASB with various stakeholders.

Who are the members of the IFRS Advisory Council?

The Council comprises a diverse group of members from around the world, representing a broad spectrum of organizations including national standard-setters, accounting firms, financial analysts, institutional investors, academics, regulators, and industry groups.

How does the IFRS Advisory Council influence the standard-setting process?

The Council provides strategic advice and feedback to the IASB and the Trustees on various aspects of the IASB’s agenda. This input helps shape the priorities and direction of future accounting standards.

How often does the IFRS Advisory Council meet?

The IFRS Advisory Council typically meets three times a year to discuss key issues and provide input to the IASB.

Can individuals become members of the IFRS Advisory Council?

Individuals cannot become members on their own. Instead, the Council consists of representatives from various stakeholder organizations. These organizations nominate individuals to represent them.

International Accounting Standards Board (IASB)

The IASB is an independent body responsible for developing and issuing International Financial Reporting Standards (IFRS).

International Financial Reporting Standards (IFRS)

IFRS are global accounting standards set by the IASB that provide common financial reporting rules for businesses and ensure transparency, accountability, and efficiency in financial markets.

Regulatory Bodies

Regulatory bodies, such as the U.S. Securities and Exchange Commission (SEC) and the International Organization of Securities Commissions (IOSCO), play a significant role in the endorsement and implementation of IFRS in various jurisdictions.

Online References

Suggested Books for Further Studies

“IFRS: A Quick Reference Guide” by Robert Kirk: This book provides a quick overview and guidance on IFRS standards, making it useful for both learners and professionals.
“Wiley IFRS: Practical Implementation Guide and Workbook” by Abbas Ali Mirza, Graham Holt, and Magnus Orrell: A comprehensive guide that helps with practical aspects of implementing IFRS in various scenarios.
“International Financial Reporting Standards (IFRS) Workbook and Guide” by Abbas Ali Mirza, Graham Holt, and Magnus Orrell: A detailed workbook for applying IFRS standards through exercises and examples.

Accounting Basics: “Standards Advisory Council (IFRS Advisory Council)” Fundamentals Quiz

### What is the primary purpose of the IFRS Advisory Council? - [ ] To create new accounting standards. - [ ] To enforce accounting standards globally. - [x] To advise the IASB on strategic priorities and issues. - [ ] To manage the daily operations of the IASB. > **Explanation:** The primary purpose of the IFRS Advisory Council is to advise the IASB on strategic priorities and issues, rather than creating or enforcing standards. ### Who can become a member of the IFRS Advisory Council? - [ ] Any accounting professional. - [ ] Individual investors. - [x] Representatives from stakeholder organizations. - [ ] Freelance financial analysts. > **Explanation:** The Council consists of representatives from various stakeholder organizations, not individuals acting alone. ### How often does the IFRS Advisory Council typically meet? - [ ] Once a year - [ ] Monthly - [x] Three times a year - [ ] Biannually > **Explanation:** The IFRS Advisory Council typically meets three times a year to discuss key issues and provide input to the IASB. ### What is one of the key roles of the IFRS Advisory Council? - [ ] Enforcing tax regulations. - [ ] Auditing financial statements. - [x] Advising on the adoption of IFRS in various jurisdictions. - [ ] Recommending penalties for non-compliance. > **Explanation:** The IFRS Advisory Council advises on the adoption and implementation of IFRS in various jurisdictions among other strategic roles. ### Which body does the IFRS Advisory Council provide strategic advice to? - [x] IASB and Trustees - [ ] SEC and FASB - [ ] Local tax authorities - [ ] National accounting bodies > **Explanation:** The IFRS Advisory Council provides strategic advice to both the IASB and the Trustees regarding the standard-setting process. ### What types of members are part of the IFRS Advisory Council? - [x] A diverse group from different professional backgrounds - [ ] Only national standard-setters - [ ] Only accounting firms - [ ] Only financial regulators > **Explanation:** The Council includes a diverse group of members such as national standard-setters, accounting firms, regulators, and financial institutions among others. ### Who handles the day-to-day operations of the IFRS standards? - [ ] IFRS Advisory Council - [x] IASB - [ ] Regional financial authority - [ ] IFRS Foundation > **Explanation:** The IASB is responsible for the day-to-day operations and setting of IFRS standards. ### Can the IFRS Advisory Council create new accounting standards? - [ ] Yes, they have full authority. - [ ] Yes, but only for regulatory bodies. - [x] No, they do not create standards but advise the IASB. - [ ] Yes, for global implementation only. > **Explanation:** The IFRS Advisory Council does not create standards. They provide advice and input to the IASB, which then develops and issues the standards. ### How does the IFRS Advisory Council support the IASB? - [ ] By conducting audits. - [x] By providing strategic advice and valuable feedback. - [ ] By enforcing compliance. - [ ] By managing financial disclosures. > **Explanation:** The primary support the IFRS Advisory Council provides to the IASB is through strategic advice and feedback, especially on vital standard-setting issues. ### What kind of input does the IFRS Advisory Council deliver? - [ ] Binding regulations. - [ ] National tax laws. - [x] Strategic advice on priorities and standards. - [ ] Sector-specific compliance requirements. > **Explanation:** The IFRS Advisory Council delivers strategic advice concerning priorities in the IASB’s work program and standards-setting process.

Thank you for exploring the complex yet essential role of the IFRS Advisory Council. Keep expanding your financial knowledge to stay at the forefront of the accounting profession!