PracticeConsultingEU’s global move.

EU's global move.

Formal proposals to insist all European Union listed companies adopt international accounting standards by the year 2005 are to be made by the European Commission by the end of this year.

In a landmark paper issued by the commission on Tuesday, Brussels said it would ‘recommend there be one set of accounting standards so company accounts throughout the European Union are more transparent and can be more easily compared.’

It said proposals would be made this year ‘which would require all EU companies listed on a regulated market to prepare consolidated accounts in accordance with IASs’, entering into force from 2005.

It added member states would be given the option of extending this requirement to unlisted companies and individual accounts.

Although many leading players in the UK accounting profession support IASs, some warned of a ‘sting in the tail’ from a proposed screening mechanism which could reject IASs if they are ‘unacceptable’.

Deloitte & Touche chairman Martin Scicluna said: ‘I cannot believe in the hands of bureaucrats such a power will be used as infrequently as they are claiming. This will become the death-knell for global accounting standards harmonisation.’

Launching the plans this week, EU internal market commissioner Frits Bolkestein said: ‘The costs of differences in financial reporting methods can be extremely onerous for investors and other stakeholders. Adoption of the proposals should result in the removal of the fragmentation in financial reporting that prevails in Europe today.’

He said it would be a ‘step forward towards developing integrated, deep and liquid capital and financial services markets, to improve capital raising efficiency while preserving investor protection.’

Regarding enforcement, the communication says that there should be a ‘high quality statutory audit, as well as strengthened coordination among European securities regulators.’

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer