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ECON report criticises current accounting standard-setting

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03 May 2016

The Committee on Economic and Monetary Affairs (ECON) of the European Parliament has initiated a report that is rather critical of the activities of the IFRS Foundation, EFRAG and the PIOB. The report will not be legally binding but will possibly be voted on in a plenary session of the European Parliament in May and if agreed will be used as guidance and reference in future EU law-making processes.

The report stresses that ECON members see shortcomings in the governance of the IFRS Foundation and the IASB, notably in terms of transparency, prevention of conflicts of interest and diversity of Board members. The report also calls for also a more diversified and balanced financing structure also based on fees and public sources. The report's authors feel that their position is backed by the high degree of funding of the IASB's budget (14%) and of EFRAG (60%) by the European Union and conclude that this means that both organisations have to follow the European Parliament standards of democratic legitimacy, transparency, accountability and integrity.

The following documents are publicly available (all on the European Parliament website):

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