IEA Chairman Prof. D.R. Myddelton writes to the FT letters page
The UK Accounting Standards Board should have listened 15 years ago when the (then) six major accountancy firms all expressed strong doubts about the so-called Statement of Principles. Instead the ASB preferred to follow the Conceptual Framework of the US Financial Accounting Standards Board, as did the International Accounting Standards Board.
What a pity that ultra-theoretical standard-setters around the world have chosen to jettison prudence, a generally accepted accounting convention derived from more than 100 years of experience. This high-risk approach has led to absurdly lengthy and unrealistic annual reports that are now virtually incomprehensible.
Emeritus Professor of Finance and Accounting,
Cranfield School of Management,
Read the letter on the FT website (registration needed)