FEE briefing note on amendments to directives

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01 May 2005

The Federation of European Accountants (FEE) has published a (PDF 35k) commenting on the European Commission's proposal to amend the existing 4th and 7th Directives to improve corporate transparency and governance.

While FEE supports the Commission's overall objectives, the briefing note expresses some concerns:
  • The location of the corporate governance statement and related audit implications cause 'serious problems' that may inhibit development of disclosure.
  • The need to clarify the types of 'arrangements' that must be disclosed (including beneficial interests, special purpose entities, and off-balance-sheet arrangements).
  • Disclosure requirements for related party transactions should not go beyond IAS 24. In addition, we wish to share some observations on the internal control disclosure requirement proposed.
  • At this stage, FEE believes that disclosures about risk management and internal control should be limited to a description of the main features of a company's internal controls over financial reporting.

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