ACCOUNTING: BOLKESTEIN WARNS AGAINST OVER-REACTION TO PARMALAT SCANDAL.
Specific measures mentioned by Mr Bolkestein include:
- tighter oversight of auditors at Member State level;
- making the group auditor responsible for the group's consolidated accounts;
- establishing rules on audit quality assurance;
- specifying rules on auditor independence and ethics;
- imposing high quality audit standards;
- ensuring that all listed companies have an independent audit committee;
- strengthening sanctions for malpractice;
- enhancing co-operation on oversight at EU and global level.
The Commissioner also reiterated his hope that Member States would waste no time in transposing the Market Abuse, Prospectus and Transparency Directives to update the rules governing securities. On the corporate governance side, he said that all company directors should be made collectively responsible for accounts while complete information should be given to investors on group structure and intra-group relations. He finished by saying: "Let's hope that the proposal that the Italian government foresees and that the European Commission is also cogitating on will make it difficult to carry out malversations [misconduct in public office]"
On the related issue of International Accounting Standards (IAS), which were also discussed by the Council over lunch, Mr Bolkestein revealed the EU's strategy for securing a satisfactory solution on IAS 32 and 39 which have tripped up over fair value reporting. These two standards, which deal with financial instruments, had to be left out of the package of standards approved by the EU last year under the IAS endorsement mechanism. "We decided that we should try and solve as much as possible of the contentious matter before the IAS Board announces its proposal in March", he said. But this is unlikely to include the core difference over fair value, which the IASB is doggedly pursuing, and the Commissioner said that any contentious matter not solved by March would be "put in brackets" for those that have to use IAS from the start of 2005. In the meantime, a high-level group will be set up to try and square the circle in more intensive sessions.
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|Date:||Jan 21, 2004|
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