This paper considers areas in which the regulation and enforcement of accounting standards, and auditing standards in particular, have contributed to the recent global financial crisis. As well as the impact of such standards on pro cyclicality, the level of success achieved by international standard setters such as the Basel Committee for Banking Supervisors, relates to how effectively the accounting and audit standard setting is implemented. Collaboration between authorities such as CESR (Committee of European Securities Regulators), CEBS (Committee of European Banking Supervisors), and CEIOPS (Committee of European Insurance and Occupation Pensions Supervisors), as identified by the Report of the High Level Group on Financial Supervision in the EU, is also vital in determining how far the IASB is able to achieve its goals. As well as identifying the importance of convergence in contributing towards high quality audits and the consistent application of auditing and accounting standards, this paper also acknowledges the difficulties and challenges encountered in attempting to achieve a convergent framework. Furthermore, through a discussion of recommendations aimed at consolidating transparency and accounting, as proposed by the G20, ways in which accounting standards, and consequently the IASB, could contribute further to the improvement of transparency and accountability of the framework for fair value measurements and evaluation, are considered. However some factors still present sources of obstacles to the IASB’s attempts to realise the proposals put forward by the G20. This paper not only attempts to address such factors, but also to suggest ways in which the IASB, to an extent, could realise its goals. The IASB at present, has no enforcement mechanism. Enforcement actions are carried out at national level in various EU member states. Through a consideration of two enforcement regimes in Europe, namely, Germany and the UK, two related standards which govern enforcement in Europe, principles on which harmonisation of the institutional oversight systems in Europe may be achieved , and the vital contribution made by CESR and EFRAG (the European Financial Reporting Advisory Group), this paper will consider how enforcement could be implemented by the IASB at European level. Enforcement at European level is also important having regards to results of the peer review, which was carried out by CESR’s peer pressure group, the Review Panel, in July 2009.
