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EFRAG recommends public fatal flaw review of IASB pronouncements

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

30 Sep 2014

The European Financial Reporting Advisory Group (EFRAG) has written a letter to the International Accounting Standards Board (IASB) recommending that prior to finalisation of a standard or a major amendment to a standard a public fatal flaw review should take place. EFRAG believes that this would enhance the IASB's quality control procedures.

The IASB at times uses the tool of fatal flaw reviews, however, membership of the review teams is restricted. EFRAG believes that a public fatal flaw review should be included as a formal step in the IASB's due process including discussion of the fatal flaw results in a public meeting of the IASB based on a public summary report of these results before the final text of a standard or major amendment is approved by the IASB. EFRAG had made a similar suggestion in its comment letter on the proposed IFRS Foundation Due Process Handbook, which was published in its final version in February 2013 without the change EFRAG suggested.

Please click for access to the letter to the IASB on the EFRAG website.

Update: Subsequently, the EFRAG published on its website a feedback statement summarising comments in response to the EFRAG Draft Letter and showing how those comments were considered. The feedback statement is available on the EFRAG website.

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