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EU IFRS discussions need to look at bigger picture
News that representatives of Europe's capital market regulators and the accountancy profession are to meet to discuss concerns over the implementation of International Financial Reporting Standards (IFRS) in the EU in 2005 has been given a cautious welcome by ACCA.
ACCA is concerned that the discussions between the Committee of European Securities Regulators (CESR) and the Federation des Experts Comptables Europeens (FEE) will focus too much on the role of auditors in ensuring investors can have confidence in financial statements.
In an open letter to the accountancy profession CESR has rightly drawn attention to the importance of heightened vigilance following a number of high profile corporate reporting problems in Europe in the past year, including Parmalat, Adecco and Ahold, but ACCA argues that there should be an appropriate balance between the responsibilities of all parties.
The chain of production for releasing financial statements includes internal management, internal auditors, directors,and often external advisors such as lawyers as well as the external auditors. To focus on the external auditors is too narrow an interpretation of responsibility.
ACCA believes that, in order to get a fully rounded view of the issues surrounding the implementation of IFRS in Europe in 2005, when all listed companies must report to the new standards, discussions should range widely over reporting, auditing and corporate governance of EU listed companies.
All parties involved in the production of financial statements must recognise their respective roles and responsibilities.