The committee on economic and monetary affairs for the European parliament will meet early in November to discuss amendments to the European Commission’s directive on transparency requirements. Rapporteur Peter Skinner has removed the mandatory requirement for quarterly reporting, instead offering it to individual nation states as an option.
Skinner reported that quarterly reporting was ‘not the appropriate mechanism’ for ensuring the dissemination of reliable information and ‘could represent a worsening of the situation’. He said that it would create a focus on short-term earnings performance instead of long-term strategy, and the demands placed on management to release continually better figures each quarter ‘contributed, to a large degree, to the many corporate scandals of recent years’.
He also advised that smaller listed companies would struggle to cope with the costs and demands on resources that quarterly reporting would require.
A decision on the matter is still some way off, however, as the directive is going through a co-decision procedure that requires approval from the European parliament and the council of ministers.
‘There is quite a lot of support from members of the council for mandatory quarterly reporting that could stop these changes,’ said a source close to the discussion.
‘There is likely to be some compromise on the issue, but it’s still hard to see on what scale this will be.’
The parliament hopes to have the directive passed before elections next April. However, a spokeswoman for the parliament said this timetable would depend on how much disagreement there was over issues, such as mandatory quarterly reporting, the compulsion to state management remuneration and the disclosure of payments to governments.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements