Since I introduced a measure criticising IFRS accounting and requiring banks to prepare accounts to UK standards, there have been a stream of developments backing up my criticisms. The problem extends as far as Korea. Via bruegel.org:
Korean firms’ business activities, such as risk management and foreign investment, have been affected by the obligation since 2011 to adopt International Financial Reporting Standards (IFRS). Korean banks may need to reshape their credit-rating models and enhance their loan-collection systems to prepare for further changes in loan-loss accounting. In addition, the financial authorities must provide adequate guidelines to minimise discretionary accounting and organise regulatory acts in order to prevent false disclosure.
Accounting seems so eye-wateringly tedious and yet a commercial society requires good quality accounting as foundation stone. The International Financial Reporting Standard seems to be yet another failed grand design. It appears is has forced a flawed model of loan-loss provisioning, amongst other things, on much of the world, simultaneously damaging institutions worldwide.
Yes, it would be wonderful to have a perfect global accounting standard, but people ought to be much more humble about what they imagine they can design. Far better to let a variety of standards evolve and compete than to impose a grand plan with inevitable unforseen consequences.