PracticeAuditICAEW wants ‘principles’ approach in Europe

ICAEW wants 'principles' approach in Europe

The ICAEW says European countries should be able to adopt their own enforcement models provided they operate on the basis of 'common concepts and comparable techniques'.

Link: ‘IAS deadline is still achievable’

These comments came in response to Committee of European Securities Regulators consultation paper, Proposed Statement of Principles of Enforcement of Accounting Standards in Europe.

It also called for a single national body that would have ‘ultimate responsibility’ for the effectiveness of the enforcement regime when international accounting standards come into force across Europe in 2005, and by which all listed companies must abide.

UK accounting standards are based on principles, while those in the US are based on rules. Many amongst the profession have blamed the Enron and WorldCom disasters that happened across the pond over the last 18 months on the enforcement of such inflexible rules.

Robert Hodgkinson, ICAEW director of technical strategy, said: ‘It is vital that an effective system of enforcement is in place by 2005 to counter the risk that inappropriate accounting may undermine investor confidence in Europe following the implementation of International Accounting Standards.

‘Companies and other capital market participants should be confident that non-compliance is likely to be detected. However, the proposed co-ordination mechanism should be flexible enough to embrace all sectors and entities that use IAS, not only listed companies.’

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

3d Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

1w Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

2m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter