Fears over EU code.

Fears over a ‘get-out clause’ have tempered the profession’s welcoming of the European Commission’s drive to make international accounting standards compulsory by 2005. The commission’s move to require European companies to use a single set of standards has given a major boost to supporters of a unified global accounting code. But, the commission has incorporated a clause allowing domestic regulators the power to demand additional disclosure if necessary. Sir Bryan Carsberg, secretary-general of the International Accounting Standards committee, said: ‘If the committee was to decide to alter standards it would be very damaging for the whole cause of global harmonisation.’ Many experts view the extra oversight power as undermining the harmonisation process and an indication that the US will follow suit. Mary Keegan, PricewaterhouseCoopers’ head of global corporate reporting group, echoed Sir Bryan’s concerns and urged the commission to reconsider its proposal. ‘We should look towards a worldwide language for accounting and not complicate matters for companies and regulators by implying the use of a local dialect.’ KPMG’s Ted Awty said: ‘This would have two most unfortunate consequences. First, we could then see three bodies of accounting battling it out for global domination, US GAAP, IAS and EU GAAP. ‘Second it could deal a fatal blow to the credibility of IAS internationally,’ he added. But Sir Bryan called for optimism in the face of the EC’s proposed two-tier filter mechanism indicating that it would not be necessary provided that the commission remained in consultation with the IASC. Others backed Sir Bryan’s positivity hoping that the filter mechanism would be a temporary measure and not the norm. Graham Ward, the English ICA’s new president, said: ‘We hope that it will be regarded as a transitional measure and that the quality of output of the restructured International Accounting Standards committee will quickly render the mechanism superfluous.

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