Priorities in the EU Internal Market

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25 Mar 2007

In a seech on priorities in the internal market, European Commissioner for Internal Market and Services Charlie McCreevy discussed progress on the SEC's 'roadmap' to eliminating the IFRS-US GAAP reconciliation and suggested a similar roadmap on auditing might be appropriate.

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Accounting Accounting is a prime example of how close cooperation with our US partner is bearing fruit. The EU and the US are advancing on a roadmap for removal of reconciliation requirements based on the principle of equivalence. The Commission is working together with the US SEC towards removing the costly and unnecessary reconciliation requirements for IFRS and US GAAP. Earlier this month I met SEC Commissioner Christopher Cox and we took stock on the progress of the roadmap. I am pleased to confirm that we are well on track. We are both committed to further improving our regulatory cooperation.

Auditing Building the framework of a more open transatlantic market also calls for the EU and the US to work on cooperation in the audit field. Both sides have their own set of rules: the 2006 Statutory Audit Directive in the EU and the 2002 Sarbanes-Oxley Act in the US. Both sides want to ensure sound investor protection, balanced with giving our markets freedom to act. One key measure to achieve this objective is the role of independent watchdogs for the audit profession, what we call the public oversight systems. What we need now is to find ways to rely on each other in accomplishing our shared objective, so as to avoid costly and inefficient duplication of work. A system based on mutual trust would therefore exempt both sides from the burden of sending inspectors abroad.

Earlier this month PCAOB chairman Mark Olson and I agreed in Washington to launch roadmap discussions on equivalence of our respective auditing systems, in the same spirit as in accounting.

This does not require systems and standards to be identical but robust enough to ensure investor confidence. Robust enough for each of us to have confidence in each other.

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