Following a review by former president of the European Investment Bank Philippe Maystadt, new recommendations for enhancing the EU’s role in international accounting standard setting are due to be presented to EU finance ministers on 15 November 2013. Eversheds has commented ahead of the presentation of these recommendations.
Michael Wainwright, partner and financial regulation expert at Eversheds, said: ‘Common accounting standards are fundamental to the efficiency and transparency of markets in all sectors of industry. They are not just for financial services.
‘Considerable effort has gone into harmonising standards at an international level. Harmonisation makes it possible to prepare consolidated accounts for international groups and to compare the financial performance of competing groups and sectors. At the same time, accounting standards need to change to keep pace with market developments and innovations. The most effective way to achieve this in practice has been to make standard setting the responsibility of committees of technical experts.
According to Wainwright, it is not the job of the EU commissioner for financial services to sabotage these arrangements by seeking to apply political pressure to the process of standard setting and by creating EU opt-outs. ‘The enlightened approach is to apply modifications for regulatory reporting purposes, for particular firms and in specific areas where the accounting objectives that the standards are designed to meet conflict with the objectives of financial regulators.’