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.

It should not come as a surprise that we need to reduce the administrative burdens in the areas of company law, accounting and auditing. The basic features of the market have changed: new technologies, the introduction of the euro, enlargement, globalisation and demographic developments have dramatically affected the overall context of European integration and brought about considerable pressure to adapt. The legal environment has also evolved with the adoption of international standards in the field of accounting and auditing and the development of the jurisprudence of the Court of Justice....

In the field of accounting and auditing, we are focusing on the possibilities of reducing costs for SMEs. Of course, we need to keep improving the quality of accounting and auditing in the EU. However, the existing rules demand administrative work which companies, and particularly small and medium-sized ones, find sometimes unnecessarily burdensome. Our job is to reconcile these different interests in the best possible way.

The attributes of a good principle-based standard:

• Is written in plain English
• Is easily explained
• Makes intuitive sense
• Fairly presents the facts.

The changes that are necessary for principle-based standards to succeed:

• Training changes
• Greater user sophistication
• No second-guessing by regulators
• Don't ask for rules/interpretations
• Support for careful judgement

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