Lord Lawson [Speaking in House of Lords on 23 October 2013, and reported in Hansard]

“The difficulties with IFRS are huge. Noble Lords may have seen the interesting article in the Accountant by Emile Woolf—one of the best known chartered accountants—who writes from time to time. I commend the whole article: noble Lords might find it beneficial, although they will be glad to know that I will not read it all out. Woolf writes that:

“The lapse of accounting and auditing rigour that has allowed IFRS compliance to dissemble truth and fairness has brought shame on our profession and begs the question of exactly what is our purpose”.

That is pretty strong wording, but it is well justified. The true and fair have effectively gone and the importance of prudence has given way to box-ticking. I understand why valuation by mark to market has come in. There were different difficulties with the historical cost basis but the result of mark to market has meant that in many cases, purely fictitious paper profits are in the accounts. Not only does that make the bank look stronger than it really is but, of course, these are then distributed in bonuses or whatever. It is a disaster. And there are other defects. The change in the provisioning requirements is totally inadequate.

It is probably true that there is a grudging acceptance of that throughout many of the leaders of the accountancy profession. The problem is that IFRS is enshrined in European Union law. Therefore, it cannot be changed without the agreement of all the members of the European Union. They are talking and talking and talking, and they are producing documents on one aspect or another. Goodness knows when they will reach agreement. Goodness knows if they will ever reach agreement.”