New EFRAG governance structure will become effective 31 October 2014

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19 Jun, 2014

On 16 June 2014, in an EFRAG General Assembly meeting, EFRAG's existing 7 Member Organisations have approved the revised EFRAG Statutes and Internal Rules and admitted 8 new members. The effective date of 31 October 2014 was chosen because the European Commission will only be able to nominate the President of the EFRAG Board after having heard the European Parliament and the Council of Ministers, which is expected to to take place in early autumn.

The revised EFRAG Statutes and EFRAG Internal Rules that reflect the recommendations of the Maystadt report will establish a new EFRAG Board that will be responsible for all EFRAG positions with the objective of Europe speaking with one voice, facilitated by a consensus-based decision-making process in the EFRAG Board.

According to the revised EFRAG Internal Rules, the EFRAG Board is responsible for all positions of EFRAG, after having considered the technical advice provided by EFRAG TEG and reflecting the results of EFRAG's due process and must ensure that EFRAG has an open and transparent due process including a public consultation process with European constituents on draft EFRAG positions such as discussion papers, draft comment letters, draft consultation documents and draft endorsement advices. Specifically, the Internal Rules list the following responsibilities:

  • To set the strategic direction of EFRAG taking into account the priorities defined by the European Commission in respect of developments in international financial reporting standards (IFRS);
  • To provide directions to and request technical advice from EFRAG TEG on issues relevant for the EFRAG Board's positions, oversee the work of the EFRAG TEG, and provide guidance and feedback to the EFRAG TEG on its work;
  • To provide directions on the field work of EFRAG where specific consultations or investigations are deemed necessary to provide an economic assessment;
  • To ensure the optimal use of European resources;
  • To advise the European Commission on the strategic direction in relation to financial reporting;
  • To consider and comment upon proposed developments to European regulations, directives, guidelines and guidance as requested by the European Commission;
  • To decide on the agenda of EFRAG's research activities, after consultation with the European Commission and after public consultation on possible projects to be included in the research agenda, when deemed necessary, so as to stimulate the accounting debate in Europe and influence the IASB; and
  • To provide input to the IASB’s agenda consultations after consultation with the European Commission and after public consultation.

EFRAG TEG, which is expected to have at least ten physical meetings every year lasting for an average of three days, provides technical advice to the EFRAG Board, however, the latter has sole responsibility for all EFRAG positions. EFRAG TEG provides its own professional judgment, arguments and technical analysis based on its technical expertise and on EFRAG's due process. EFRAG TEG's advice then forms part of the EFRAG Board agenda papers for the Board’s finalisation and approval. EFRAG TEG will also provide input for the EFRAG research activities in the financial reporting arena in active projects launched by the EFRAG Board. It is expected that EFRAG TEG will deliver sound technical judgments supported by reasoned opinions without regard to the particular interests of member or nominating organisations.

Please click for the following information on the EFRAG website:

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