ACCOUNTING: EFRAG CONSULTS ON EXPANSION OF STANDARD-SETTING ROLE.
At present, EFRAG is not recognised as the authoritative voice on European standard-setting by either the European Commission or the IAS Board in London. But the consultation proposal calls for EFRAG's position to be formalised by both bodies, in order to enhance its influence. For this to happen, EFRAG believes it must increase its presence by employing a full-time chairman, and monopolising more of its constituents' time. It also proposes closer work with Member States' standard-setters through a new Consultative Forum, from which EFRAG would be able to second staff for work on specific projects. At the same time, transparency should be enhanced by introducing decisions by simple majority and publishing any dissenting opinions.
EFRAG says it has a mandate for expansion from the July 2003 Economic and Financial Affairs Council, when Ministers agreed that European concerns need to be more fully taken into consideration in the international accounting standard setting process. It has been reviewing its own role since early 2003. This review coincided with mounting criticism in Europe on the general direction of certain International Financial Reporting Standards, (IFRS). "The proposals will make EFRAG more effective by improving its internal organisation, increasing transparency, and by strengthening EFRAG's impact on the global standard setting process", said EFRAG Supervisory Board Chairman Goran Tidstrom. The consultation will run until January 12, and a public hearing is planned in Brussels for January 8.
The European Financial Reporting Advisory Group is a technical committee set up as a private-sector initiative after the Commission proposed in February 2001 that all listed companies in the EU should go over to using International Accounting Standards for preparing their annual accounts by 2005. Its founding fathers were the main European lobby groups representing accounts preparers and users and banking and financial service-sector groups, namely, UNICE (industry and employers), FEE (accountancy industry), CEA (insurance), FBE, ESBG and GEBC (credit and banking), FESE (stock exchanges), EFFAS (financial analysts), UEAPME and EFFA (small businesses). EFRAG has provided valuable technical expertise on the use of IAS within the legal environment and has worked closely with the Commission and the Accounting Regulatory Committee on the endorsement mechanism for passing the existing international standards through into the EU's own legal system.
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|Date:||Dec 6, 2003|
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