Challenges to transition to IFRSs in Europe

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21 Oct 2005

Charlie McCreevy, EU Commissioner for Internal Markets and Services, spoke about proposed revisions to the Eighth Directive – commonly known as the Auditing Directive – in remarks delivered at the Global Public Policy Symposium on 20 October 2005 in London.

Mr. McCreevy also spoke about global issues, including convergence of IFRSs and US GAAP. Click to (PDF 88k). Here is an excerpt of his comments on convergence:

We have an agreement with the SEC with the objective of removing the burdensome US GAAP reconciliation requirement for EU issuers in the US, as early as 2007, but no later than 2009. The convergence this will entail must be a two way street and it must not destabilise the IFRS platform in Europe. I would like to stress that convergence is not an invitation to standard-setters to try and advance the theoretical frontiers of accounting. I will not take on board any revolutionary new standards. This should be a practical exercise, firmly anchored in business reality, to be undertaken in the interests of users and investors. The main objective is to try and narrow the differences between the existing standards, not to make accounts even more indigestible with a whole set of new standards!

We will not be adding new carriages to the IFRS train, just as it has left the station. We need, first and foremost, to be sure that existing IFRS beds down and that we reap the benefits at home.

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