The European Federation of Accountants has warned Europe to be careful of simplifying financial rules to the detriment of public and investor protection.

The reaction from FEE (Fédération des Experts Comptables Européens) follows yesterday's announcement on proposals to reduce EU rules relating to company law, accounting and auditing, from Internal Markets Commissioner Charlie McCreevy.

FEE said it strongly supports the moves towards better regulation and simplification, as well as the reduction of administrative burdens that enable SMEs to focus on business and growth.

But the organisation said this had to be balanced with other public policy goals such as stakeholders' information, investors' protection, markets' stability and the reduction of transaction costs and cost of capital.

FEE president, Jacques Potdevin, said: 'Today's proposals to reduce EU rules will struggle to deliver the expected and much needed reduction of administrative costs, most of which originate from regulatory requirements at national level.

'Furthermore, the approach to accounting and auditing appears in many respects to overlook the added value which accounting and auditing provide to a wide range of stakeholders such as managers, business partners, bankers, creditors, investors, employees, trade unions and public administrations. In our experience, greater burdens for business derive, for instance, from multiple and often overlapping regulatory requirements.'

FEE CEO, Olivier Boutellis-Taft, said professional accountants are in a prime position to inform the simplification debate and advise on practical measures since they were involved with business and SMEs daily.

Further reading:

McCreevy announces moves to reform Europe's 30-year-old financial rules regime