FEE ditches plans for Euro pressure group

The Federation des Experts Comptables Europeens is set to abandon plans for a European pressure group to counter the threat of US domination in international accounting standards.

FEE floated the idea of a European Accounting Research Foundation, fearing the growing influence of the US Federal Accounting Standards Board on the International Accounting Standards Committee’s work programme for a set of core global accounting rules to be implemented by early 1998.

The objective of the organisation was to encourage the IASC to place topics of specific interest to Europe on its work programme, but FEE shelved the project at the implementation stage because funding from the private sector was not forth coming.

A prospectus was circulated to various European institutions, such as the European Federation of Financial Analysts and various stock exchanges, but John Hegarty, FEE’s secretary general, said: ‘These bodies just don’t have the budget for something like this at the moment.’

Though the FEE is reluctant to fund the body internally, Hegarty conceded that there is a need for a European voice in international accountancy: ‘The IASC only approves standards with a high quality of research and convincing arguments. The US has tremendous research resources in the form of the Financial Accounting Standards Board which employs hundreds of full time staff.’

He added: ‘Europe has to be able to match the quality of FASB and one way to do that is to centralise European accounting research and come up with standards that will pass the IASC quality thresholds.’

Hegarty stressed the dangers of excessive US influence in the accounting standard process: ‘The IASC income tax standard was driven along by US accounting standards and the very specific characteristics of the US tax system.’

However, Ken Wild, technical partner at Deloitte & Touche, said it is important to have a European voice, but throwing money into accounting research is not necessarily the right answer. He pointed out that on a smaller budget the UK Accounting Standards Board developed a standard on goodwill that is a step ahead of the US.