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EC seeks 'political accountability' for IASB

  • European Union (old) Image

06 May 2005

In a Green Paper on Financial Services Policy (2005-2010), the European Commission sets out its financial services policy priorities for the next five years, with the goal of fostering an integrated, open, and competitive financial market "where financial services and capital can circulate freely at the lowest possible cost throughout the EU – with adequate and effective levels of prudential control, financial stability and a high level of consumer protection." The regulation requiring IFRSs for European listed companies and permitting member states to extend IFRSs to unlisted companies is part of that policy.

The Green Paper suggests that the oversight and accountability of the IASB need to be strengthened:

The debate about the future governance, funding and political accountability of global standard-setting bodies, such as the International Accounting Standards Board, are of growing political importance. The Commission considers that public oversight of these structures must be strengthened, to ensure appropriate reflection of stakeholders, satisfactory transparency, due process and sustainable financing.

Annex 1 to the paper discusses the EU-US regulatory dialogue. A key goal of the Commission is to "work towards equivalence/convergence between IAS and US-GAAP – agreeing a roadmap and timetable are now urgent." The paper notes that the Commission will wait until the end of 2006 or early 2007 before making a decision on the IFRS-equivalence of the major third-country accounting systems (Canadian, Japanese, and US). Click to download: The Commission has invited comments on its policies by 1 August 2005.

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