RegulationCorporate GovernanceEC tightens rules on annual accounts

EC tightens rules on annual accounts

European Parliament toughens companies' requirements for annual and consolidated accounts in bid to fight fraud

The European Parliament has agreed changes to the European Union’s (EU)
rule-book on annual and consolidated accounts, toughening companies’
requirements to fight fraud and irregularities, while exempting a large number
of smaller businesses from many demands.

Its vote was welcomed by EU internal market commissioner Charlie McCreevy:
‘We improve disclosure for the most complex listed and unlisted companies, and
at the same time allow member states much more scope for reducing burdens on
small and medium-sized companies.’

The parliament notably widened thresholds for small and medium-sized
companies under a key 1978 (78/660/EEC) directive on annual accounts, allowing
them to file simplified returns.

These have been raised from 3.6m to 4.4m euros (balance sheet total) for
smaller businesses and 14.6m to 17.3m euros for medium-sized businesses. MEPs
also agreed to enshrine in EU law the collective responsibility of limited
company board members for any published financial and other key information
about their companies.

They also accepted that more information should be published on large and
unusual transactions with related parties such as family members and company
managers for all bar smaller unlisted companies. The changes will now receive a
formal vote from the EU Council of Ministers, which may approve them unamended.

Related Articles

Corporate governance: staying ahead in accountancy

Corporate Governance Corporate governance: staying ahead in accountancy

3m Alia Shoaib, Reporter
One in 20 audit firms quit as market evolves

Audit One in 20 audit firms quit as market evolves

1y Kevin Reed, Writer
Colin: #EURef bankers a problem

Business Regulation Colin: #EURef bankers a problem

1y Taking Stock
PwC and Deloitte chiefs sign Remain letter

Business Regulation PwC and Deloitte chiefs sign Remain letter

1y Kevin Reed, Writer
Leader: Audit competition drives change, not necessarily quality

Accounting Firms Leader: Audit competition drives change, not necessarily quality

1y Kevin Reed, Writer
EU audit reform to open up £10bn market for firms

Accounting Firms EU audit reform to open up £10bn market for firms

1y Richard Crump, Writer
Best Practice: Saffery Champness managing partner Rob Elliott

Accounting Firms Best Practice: Saffery Champness managing partner Rob Elliott

2y Calum Fuller, Reporter
Standard Life Investments opposes EY's appointment as Shell auditors at AGM

Accounting Firms Standard Life Investments opposes EY's appointment as Shell auditors at AGM

2y Richard Crump, Writer