Supporting standard-setting

Standard setting can be a fine art of balancing differing and often competing views of multiple stakeholders. Satisfying the needs of financial statements users, preparers and auditors is a huge challenge.

The International Association for Accounting Education and Research (IAAER) facilitates contributions from academics to inform the work of global standard setters. It collaborates with, for example, the International Accounting Standards Board (IASB), the International Auditing and Assurance Standards Board (IAASB) and the International Federation of Accountants (IFAC).

In these collaborations, the IAAER aims to promote the use of rigorous academic research to inform standard setting. One current focus is the IASB project addressing the statement of cashflows, intangible assets and climate-related risks (see AB article ‘IASB lays out plans’).

‘We’re early in our current round of research, having just passed the first deliverable,’ says IAAER president Elizabeth Gordon. ‘Our programmes are focused and intensive in terms of what we ask of our research teams. Our grant programmes are closely tailored to the interests and needs of the standard setter’.

Founded in 1984, IAAER has individual and institutional members (including ACCA) in more than 40 countries. Since 2009, it has had a representative on the IFRS Foundation Advisory Council.

‘Sir David Tweedie, the first chair of the IASB, was committed to working with educators, especially the IAAER,’ says Donna Street, IAAER director of research and educational activities. ‘Sir David was instrumental in launching our grant programme to inform the IASB’.

Current focus

Each research project takes three years, starting with meetings with the IASB to ensure the research teams are focused on delivering research in areas where the board seeks evidence. The latest round of research comprises ‘The landscape of intangibles reporting’; ‘Understanding cash flows’; and ‘Boundary of climate-related risks in the financial statements’.

IAAER also recently worked with the IAASB, supporting literature reviews on assurance of extended external reporting and audit evidence. The IAAER and the IAASB are now exploring how research can support the reconsideration of ISA 500 (Revised) as the Board tackles an ‘integrated approach’ to audit evidence and risk response, including focusing on technology and internal control.

Sustainability reporting and assurance features high on the IAAER’s priorities, with the association recently organising a roundtable with IFAC in January to address challenges in incorporating sustainability coverage into accounting curricula. IFAC will soon publish a summary of the roundtable discussions.

Another initiative, launched in 2023, helps develop young scholars and researchers: IAAER ACCA Early Career Researcher Development Program. It will run for at least two years, providing training and mentorship opportunities to 15 early career professors from Central and Eastern Europe.

‘It’s important to have an international organisation such as the IAAER working with the IASB and the IAASB as well as IFAC’s education and research initiatives,’ says Street.

‘I’ve been at the table with 16 IASB board and staff members listening to our IAAER research teams and providing active feedback. Participation like this directly speaks to the impact the IAAER can have. This is especially important in today’s world, with standard setters facing many changes and challenges.