This article examines the prospects for the International Accounting Standards (IAS) based on a discussion held by U.S. and British academics in August 2001. Participants recognized several key challenges to widespread implementation of IAS. These include the need to improve the quality of current IAS, the plan of the European Commission to require adoption of IAS for the 7,000 listed companies in the European Union by 2005, the attitude of the U.S. Securities and Exchange Commission toward IAS and ensuring compliance. One participant claimed that IAS currently had a bad reputation. To ensure worldwide credibility, alternative treatments and ambiguities must be cleared out. Principles-based standards with interpretation guidance are preferred to detailed rule-based standards, which simply get longer and more tortuous as companies find ways round the rules. The planned adoption of IAS in the European Union by 2005 is ambitious. The biggest obstacle is seen as the European Commission itself, which is establishing its own committees to oversee the process. In spite of the criticisms, IAS is determined to make progress.
