The House of Lords Economic Affairs Committee has concluded that the International Financial Reporting Standards (IFRS), introduced into British accountancy practice by EU edict, are flawed.
Criticised at the time by the Society of Statisticians as being dangerous, Gordon Brown insisted on their implementation. The committee took evidence from heavyweight capitalist institutional investors and concluded that these rules allowed banks to hide risks, to pay bonuses on “imprudent” calculations, and to hide bad loans. In other words bankers’ bonuses in certain instances were based on mistakes or possibly fraudulent practice.
One expert witness called for “the re-introduction of a more principle-based accountancy system” and said the IFRS rules encouraged people to go round them. Another expert witness described the IFRS as a “regulatory fiasco’’.