The European Commission's strategy on accounting and auditing

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04 Mar 2004

In an address to the Institute of Chartered Accountants in England and Wales in London earlier this week, Frits Bolkestein, Member of the European Commission in charge of the Internal Market, Taxation and Customs, spoke about The European Commission's Strategy on Accounting and Auditing.

His presentation covered use of IFRS in Europe, EU measures on statutory audits, and EU/US relations in this area. Download the (PDF 71k). An excerpt:

The Commission has promoted a strategy based on a principles-based approach to financial reporting, designed to reflect economic reality and give a true and fair view of the financial position and the performance of a company. At the heart of our strategy is the application, from 1 January 2005, of International Accounting Standards. I remain firmly committed to this strategy.... Nonetheless, as regards adoption and application of IAS a few stubborn issues remain to be resolved: in particular hedging of core deposits in the context of IAS 39 and the so-called 'insurance mismatch'. A European Consultative Group was recently set up to address these issues. Personally, I am still convinced that acceptable temporary solutions can be found in the short term, pending longer term work by the IASB. I have urged Sir David Tweedie to continue working in the short term with technical experts - around the clock if necessary - to try to find such appropriate solutions. One of the problems we have, unfortunately, is a lack of trust between the interested parties. Due process has not been optimal so far and must improve in future.

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