Profile: Ian Mackintosh FCA

By Emily Chantiri

In July 2011 Ian Mackintosh FCA stepped into the biggest role of his career – taking on the position of vice-chairman of the International Accounting Standards Board (IASB). Prior to his appointment, Londonbased Mackintosh – who has a long history in accounting standards – held the position of chairman of the Accounting Standard Board (ASB) in the United Kingdom. A New Zealander, he has spent much of his career working in the accounting standards sector in Australia.

Mackintosh recently returned home to Sydney as part of a global tour to visit nations within the IASB framework. While in Sydney his efforts were concentrated on four convergence issues.

He says he is well aware of the impact of these changes and understands that people are asking for a period of calm. “The job of IASB is to keep in touch with its constituents and to let them know that the board is aware of their problems. Rest assured, we’re working on them and we are taking all these into consideration. Agreements have been reached on two,” says Mackintosh.

Revenue recognition is the first of the four convergence items. An exposure draft has already been completed and is currently available on the IASB website for comment. “The process takes several months. The draft is posted on our website for comments from stakeholders, companies or institutions. Accountants can use this opportunity to comment on the draft. We encourage comments,” he adds.

Next on the agenda is the issue of leasing, which has retailers hot on their heels. “We understand the issue of leasing is incredibly important. Once carried through, it will bring a number of liabilities onto the balance sheet that weren’t there before. The exposure draft will be available at the end 2011. Again, we are seeking comments from our constituents through our website,” he says.

The third agenda item is insurance – IASB aims to establish a common insurance standard – and the fourth item is financial instruments. Mackintosh is calling for patience, as there will be some major changes for financial institutions, particularly in light of the current global financial crisis.

“This is an important issue for all to get convergence. Take for example write-offs and the current sovereign debt crisis. If any bank has Greek bonds what value should they be held on balance sheets at present? Today, they’re not worth as much as when they were issued. We are working hard to get convergence on this standard. We hope to get an exposure draft on this in 2012,” says Mackintosh.

The Euro problem

As for the impact from the other European nations plagued by economic woes, such as Iceland, Portugal and Italy, he adds the IASB has a critical role to play.

“Our most important role is to have the right financial reporting in place so, as things transpire, accounting departments are able to write off quickly,” says Mackintosh. He says government must also be held accountable too. The bigger question is how governments themselves report. The basic responsibility for this area is with the International Public Sector Accounting Standards Board (IPSASB). Ideally, we’d like to work closely with them, so that we understand each other’s point of view and work in a coordinative way rather than in a diverse way.”

Back home, he says Australian accountants will have time to adapt to the changes. The date for the final convergence on all the above items will be to complete them by 2015.

“It’s important for accountants to keep across what we are doing so they are prepared and ready. Some of these standards will make a big difference to the way they are currently reported. We understand that it will take some time and effort to grasp the changes, but we still have a few years before they are fully integrated,” he adds.

Mackintosh has full confidence in the IASB and his colleagues. “It’s remarkable what has been achieved in the last 10 years. We have been going for just over a decade and the previous chairman, Sir David Tweedy CA and his team have done a fantastic job to keep standards in line. We are running fast to get standards set in place not just in Australia, but globally,” he says.

He further adds that he is well aware of the load chief financial officers are carrying in regard to how the changes will effect their board and management. “CFOs and their boards are used to doing things a certain way. Nobody likes change – this could mean change in some areas as to how they look at their figures. Naturally, these will need to be explained to their boards and to their investors.”

Global reporting

A truly globalised reporting system is in his sight. It’s a goal that Mackintosh would like to achieve during his term at the IASB. However, he is realistic and says it could be five to 10 years way. The major hurdle is getting America and Asia across the line.

“This will be attainable although the big decision lies with the USA and Asia and whether they adopt the international standards or not. We have 120 countries that have either adopted or are adopting at the moment. These two nations are a dominant economic force. To be truly global, the USA and Asia has to agree.” He says the US Securities and Exchange Commission will decide towards the end of 2011 if the USA adopts the international financial reporting standards.

“If they do not agree with the decision this year, then we might revisit this decision later and, if they say yes, then there is probably a five- to seven-year transition period to get this operational. We will be working closely with them over this period. So far there has been a tremendous amount of due diligence done.”

Mackintosh does not dispute the fact that accountants have been hampered by red tape. He says the standards are complex and they require a lot of judgement because they are deliberately principle-based standards and not rules-based standards.

“Accountants are sitting across large organisations with complicated transactions. Our aim will be to keep it simple and as principled as we can.” Although he adds that dealing with a global market is not always simple. “We do hear their complaints. We will do our best to address these issues,” he says.

Under his leadership, Mackintosh and his team will be taking a longer view, thinking big picture, and posing the questions: what is financial reporting? Are we serving that purpose best? Is there a better way we could do it? Yet on the other hand he adds, “I don’t think anyone wants the whole thing to be turned on its head and started again. That would be even more work! We want to spend time on the concepts, and more time on research and big-picture thinking.”

Reflecting over his time in accounting standards, Mackintosh says he has always loved the intellectual challenge of setting standards. “I know this is a cliché, but I do like the challenge. I’d like to think that I can make a difference. I believe I can in this role.”

He says his vision for the future and that of the IASB is to have one set of high quality global standards. “I’d like to see these standards applied consistently across the world. I’d like to make financial reports less complex and easier to understand. If I could achieve some of that, well, that would be wonderful,” he says.

While in Sydney, Mackintosh took a short break from the formalities of the IASB and enjoyed a couple of days visiting family and friends. In England, where he now calls home, he escapes from the pressures of the job by spending time playing golf. He also engages in a number of water sports including boating and swimming.

 

Article last updated 22 December 2011