Real time and archived audio and video webcasts will be accessible on www.sec.gov. Selected materials related to the Roundtable – including the day's agenda, a Briefing Paper, and materials submitted to the staff in connection with the discussions – are accessible at www.sec.gov/spotlight/soxcomp.htm. The Roundtable will cover a number of topics, including: (1) first year efforts; (2) reporting to the public; (3) planning and design; (4) documentation and testing of internal control over financial reporting; (5) the use of judgment in communications and conclusions; and (6) next steps. The Roundtable will feature a broad range of stakeholders involved with internal control reporting – including investor advocates, representatives of public companies, members of audit committees, auditors, attorneys, and US regulators. The members of the PCAOB will participate. Panelists include two former Deloitte Chairmen, J. Michael Cook and James E. Copeland, Jr., and current Deloitte partners Larry J. Koch and Robert J. Kueppers. Click for (PDF 43k).

Mr. O'Rourke cited an example of the price of shares in an Irish bank tumbling after it announced lower IFRS earnings, though its circumstances had not changed. He suggested that market misunderstanding, including the failure of financial analysts to study and take account of the effects of the IFRS changeover, was a major cause of the price decline. "What it has done, however, is illustrate the importance of providing a context to accounting information provided to the capital markets," Mr. O'Rourke said. Click to download Mr. O'Rourke's Remarks (PDF 31k).

We noted that two additional votes of the Duma were required before the bill would become law.

It now appears that the legislation is stalled in the Duma. A news story in Vedomosti (Russia's top business newspaper, a joint venture of the Financial Times and Wall Street Journal) on 2 February 2005 was titled 'IFRS to be Adjourned' and stated that "the effort has come to a standstill". A few weeks later (22 February 2005), an editorial in Vedomosti said that neither the business community nor government is ready for transition to IFRS because "there are no incentives for transparency and there are technical difficulties for implementation that may cause chaos in the reporting rather than increase investment attraction". The editorial also questioned the quality of current IFRS implementation by Russian banks, which have been required to use IFRSs since third quarter 2004.

Garnett

Mr. Gelard

Mr. Leisenring

Following a recommendation of their nominating committee, the Trustees of the International Accounting Standards Committee Foundation, under which the IASB operates, voted unanimously to reappoint three members of the International Accounting Standards Board to five-year terms beginning 1 July 2005 and ending 30 June 2010. The three Board members are Robert Garnett, Gilbert Gelard, and James Leisenring. Click for Press Release (PDF 124k).

In a speech to the Institute of Chartered Accountants in England and Wales in Brussels yesterday, Charlie McCreevy, the EU Commissioner for Internal Market and Services, discussed a range of issues relating to IFRSs, including:

• Convergence of US GAAP and IFRSs
• Convergence of Japanese GAAP and IFRSs
• EC consideration of the equivalence of US, Canadian, and Japanese GAAPs to IFRSs
• The EC 'carve-out' of two sections of IAS 39
• Independence of the IASB
• The need for interpretations
• Enforcement of IFRSs
• Auditor oversight
• The need for international regulatory cooperation in a globalised world

With regard to interpretations, Commissioner McCreevy commented:

Standards must not be undermined by a myriad of interpretations leading to a rules-based system. I very clearly see that the important players, such as the European Financial Reporting Advisory Group (EFRAG), CESR, and the national standard setters, have to ensure that this does not happen. And we need to consider how the links between a strengthened EFRAG and the IASB can be better defined.

Click to (PDF 77k). See also our news story of 5 April 2005 about a related speech by the Commissioner.

Those steps coincide with changes to the Companies Act to give the FRRP statutory power to require companies, directors, and auditors to provide documents, information, and explanations relevant to a question about whether accounts comply with reporting requirements. Link to the FRRP Press Release.

Recognising this, we have added a section at the bottom of the left-hand column of this home page to Spotlight a Deloitte IFRS Expert. We plan to focus on a different person every few weeks. Our first expert is Ken Wild, Deloitte's Global Leader for IFRSs. We also have placed a permanent link under 'Resources' near the top of the left-hand column.

Global Offerings Services is a global team of Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US and International accounting standards (that is, US GAAP and IFRSs) and in complying with the SEC's financial reporting rules. Past GOs Newsletters are Here.

He noted that with respect to auditing standards "the US authorities have broadly accepted the equivalence of the approach of EU Member States' audit requirements." He said he would raise the issue of mutual recognition of accounting standards with the SEC during a trip to Washington later this time, including insistence on agreement on a framework and a timetable. Click to (PDF 76k). Here is an excerpt:

Since the beginning of this year, two major sets of standards are being applied globally: US GAAP and International Financial Reporting Standards, which are being applied by listed European companies since the beginning of this year. We have to find a way to free businesses which are active on both sides of the Atlantic from the costly requirement to publish their accounts according to both sets of rules and then having to square them up. Up to now, US companies listed in Europe were able to publish their accounts in US GAAP. Under our new Prospectus and Transparency Directives, we must come to a decision about the equivalence of US GAAP to allow them to continue to publish their accounts in US GAAP. The Commission will base its decision on a technical report by the Committee of European Securities Regulators due in the summer. But this is not a one-way street – it is only reasonable for European companies to expect that US regulators will make similar efforts to judge the equivalence of our international standards with US GAAP, and once this is done, to release companies from the costly burdens of converting standards. We intend to work closely with the SEC and standard setters to find a mutually acceptable road map through this problem.

As a result, IFRSs will be applied in Italy as follows:

Listed companies, issuers of financial instruments widely distributed among the public, banks, stock broking companies, fund management companies, regulated financial institutions	Consolidated financial statements: IFRSs compulsory from 2005 Separate financial statements: IFRSs optional from 2005. IFRSs compulsory from 2006.
Insurance companies	Consolidated financial statements: IFRSs compulsory from 2005 Separate financial statements: IFRSs not permitted in 2005. IFRSs compulsory from 2006 only for listed companies that do not prepare consolidated financial statements
Subsidiary and associated companies of the above companies, and other companies that prepare consolidated financial statements	Consolidated financial statements: IFRSs optional from 2005 Separate financial statements: IFRSs optional from 2005
Companies other than the above	Individual financial statements: IFRSs optional from a year to be determined by the Ministry for the Economy and Justice
Small companies preparing financial statements in abbreviated form	Individual financial statements: IFRSs not permitted