McCreevy: The limits of accounting standards

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14 Apr 2005

EU Commissioner for Internal Market and Services Charlie McCreevy spoke last week in Dublin about The Limits of Accounting Standards: While we must have a framework that minimises the risk of fraud and malpractice if we are to sustain and nurture investor confidence, no investor should delude themselves.

Tougher regulations and laws may help stamp out false accounting. But creative accounting will always be with us – even if recent developments in international accounting standard setting makes it more challenging. That's why the task of the non-executive director, of the fund manager, of the banker, of the supplier or of any other interested party in a company's underlying financial health is to ask the many questions that the published accounts don't answer.

Published accounts will always be like bikinis – much more interesting for what they conceal than for what they reveal – regardless of more exacting accounting standards.

Click to (PDF 75k). See also news stories of 5, 6, and 13 April 2005 for other IFRS-related speeches by the Commissioner.

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