July

IFAC (International Federation of Accountants) (lt gray) Image

IFAC acts to strengthen international accounting profession

19 Jul 2003

At its meeting last week in Quebec City, the Board of the International Federation of Accountants (IFAC) took the following actions: Approved a compliance program designed to provide clear benchmarks to assist IFAC member organisations in ensuring high quality performance by accountants worldwide.

A key component of the compliance program is a requirement that each of IFAC's 155 member bodies evaluate and report on the extent to which they are monitoring compliance by their members with international standards through a quality assurance mechanism and an investigations and discipline process.
  • Approved for public comment seven proposed Statements of Membership Obligations regarding quality assurance, investigations, discipline, and member responsibilities for promoting and implementing international standards developed by IFAC and by the IASB.
  • Approved an exposure draft of a revised IFAC Code of Ethics.
  • Approved the establishment of permanent task forces to represent the interests of developing nations and small-and medium practices.
  • Approved proposals to strengthen IFAC's structure and governance, including expanding the size of the Board and including public members.
    • Click for More Information.
    PCAOB (US Public Company Accounting Oversight Board) (dark gray) Image

    PCAOB on-line registration of accounting firms

    18 Jul 2003

    The US Public Company Accounting Oversight Board has activated its On-Line Registration System for firms that audit US listed companies.

    All US public accounting firms must be registered with the Board if they wish to prepare or issue audit reports on US public companies, or to play a substantial role in the preparation or issuance of such reports, after 22 October 2003. Non-US public accounting firms that wish to prepare or issue audit reports on US public companies, or to play a substantial role in the preparation or issuance of such reports, must be registered by 19 April 2004.
    United Kingdom Image

    All UK companies will be permitted to use IFRS

    18 Jul 2003

    The United Kingdom Department of Trade and Industry has approved a regulation that permits, starting January 2005, all British companies to use International Financial Reporting Standards as an alternative to UK accounting standards.

    European law already requires listed companies to use IFRS from 2005 in preparing their consolidated accounts. In the UK, that requirement will be extended so that, starting January 2005:
    • publicly traded companies in the UK will also be permitted to use IFRS in their individual accounts; and
    • other companies and limited liability partnerships in the UK will be permitted to use IFRS in both their individual and consolidated accounts. Click for Press Release (PDF 16k).
    European Union (old) Image

    EC will propose immediate adoption of all IAS except 32 and 39

    17 Jul 2003

    In an announcement following the meeting of its Council of Finance Ministers (see story below dated 16 July), the European Commission urged the IASB and representatives of the banking and insurance industries "to pursue an active and open dialogue to reach an acceptable solution on IAS 32 and 39": "The Commission will be proposing to the Accounting Regulatory Committee in its meeting on 16th July that the EU endorse immediately all existing IAS, except IAS 32 and 39. If the Committee supports the Commission's proposal, the Commission intends to formally endorse all existing IAS except 32 and 39 in September. "IAS 32 and 39 are still being reviewed by the International Accounting Standards Board to ensure that they will provide a sufficiently rigorous solution for the accounting treatment of financial instruments for banks and insurance companies.

    IAS 32 and 39 can then be reconsidered when available."
    European Union (old) Image

    Europe adopts a single prospectus

    17 Jul 2003

    The European Parliament and Council of Ministers have approved a new Directive on prospectuses, which will simplify the process of raising capital in the EU.

    A "single passport" approved by the regulatory authority in one member state will be valid throughout Europe. The Directive covers only initial disclosure requirements at the time of capital raising. Conditions for admission to listing and ongoing financial reporting remain subject to existing European and national requirements. Press Release (PDF 13k).
    News default Image

    SEC will soon issue a report on principles-based standards

    17 Jul 2003

    US SEC Commissioner Cynthia A.

    Glassman devoted a considerable portion of a Presentation in Washington yesterday to principles-based accounting standards. She noted:

    The Commission soon will be releasing its report on moving towards a more principles-based approach to setting standards for financial reporting. It is a topic that the international accounting community is dealing with as well. . . . . . . Complying with the complicated maze of rules and interpretations that comprise Generally Accepted Accounting Principles seems to have become an end unto itself, rather than a means of providing useful information to investors and other end-users. Even worse, aggressive interpretation, technical compliance and gamesmanship have in too many instances replaced full disclosure and transparency as the guiding principles for financial reporting.

    European Union (old) Image

    EC Accounting Regulatory Committee endorses IAS minus 32/39

    17 Jul 2003

    By unanimous vote, the Accounting Regulatory Committee of the European Commission endorsed all extant International Accounting Standards for use in Europe other than IAS 32 and IAS 39 (and related Interpretations SIC 5, 16, and 17).

    The IASB is currently deliberating amendments to those two standards, and – as noted in our earlier news stories of 15-17 July – the EC wants to consider the revised standards for endorsement. Click for ARC Meeting Summary (PDF 21k). The ARC recommendation does not cover IFRS 1, First-Time Adoption of IFRS, which will be considered separately by the ARC at a future meeting.
    News default Image

    Enforcement of IFRS in Europe

    17 Jul 2003

    In a presentation on How Accountants Fit in Creating a Single Capital Market (PDF 44k) delivered at the annual meeting of the Institute of Chartered Accountants in England and Wales, Michel Petite, the EC's Director-General of Legal Service, reviewed the issues that the EU is facing in ensuring rigorous enforcement of IFRS throughout Europe, including the 10 new countries that will join the EU on 1 May 2004. Financial reporting standards require that all the members of the Enlarged EU have in place the appropriate institutional oversight for their enforcement.

    But the current structure of enforcement varies widely between member states. . . . In some member states, securities regulators are the accounting enforcers (like in France and Italy); in others, that function is exercised by a review panel (like in the UK with the Financial Reporting Review Panel); in others stock exchanges have some responsibility in this respect.
    European Union (old) Image

    Adoption of IAS 32 and 39 may be delayed in Europe

    16 Jul 2003

    Following discussion of measures for implementing the EU IAS Regulation 1606/2002, the Council of Finance Ministers (ECOFIN) issued a public announcement suggesting that IAS 32 and IAS 39 might not be adopted immediately in Europe: .

    Following discussion of measures for implementing the EU IAS Regulation 1606/2002, the Council of Finance Ministers (ECOFIN) issued a public announcement suggesting that IAS 32 and IAS 39 might not be adopted immediately in Europe:

    The Council asks the Commission to request the IASB to continue its dialogue with representatives of European industries in order to find a satisfactory and timely solution for the revised IAS 32 and 39 in view of their envisaged application.... The Council agrees with the Commission regarding the importance of an immediate adoption of all existing IAS, with IAS 32 and 39 as soon as possible thereafter. The adoption of future standards must respect the quality criteria set out in the IAS Regulation and be conducive to the European public good.

    Under Regulation 1606/2002, an Accounting Regulatory Committee appointed by the EC must endorse IASB standards for use in Europe. The ARC meets today (16 July 2003). Click for Full Text of ECOFIN Announcement (PDF 207k. The IAS discussion is on pages 14 and 15.)
    FASB (old) Image

    FASB standards are now available on line without charge

    16 Jul 2003

    The US Financial Accounting Standards Board has made the full text of all of its Statements of Financial Accounting Standards issued since the FASB's inception in 1973 available on its website in PDF format without charge for personal, non-commercial purposes.

    Each Statement is accompanied by a status page and (in most cases) a summary. The Statements are presented as originally issued – without shading to indicate amendments made by subsequent pronouncements. Statements that are completely superseded are so identified.

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