Under the regulation, all publicly-quoted companies in member countries will be required to use International Accounting Standards and International Financial Reporting Standards by 1 January 2005.

PwC called the decision 'the biggest change in European financial reporting for 30 years' and one which would make the 'EU the world's first region to have one common set of accounting standards'.

It also said the regulation would improve transparency of company reporting and act as a 'key plank' for a single European capital market.

Ian Wright, leader of the Global Corporate Reporting Group at PwC, said the requirement to use IAS in Europe now had 'legal certainty'.

'Companies should take this as their cue to start the change process in earnest. A first step might be to assess the full impact of IAS on profits, assets and other key financial results, if they haven't done so already,' he added.