In the opening address to a packed conference hall in Paris Rake told delegates that ‘IAS conversion was absolutely critical’ for Europe to compete with the US.
‘The pace of change is irresistible. Europe is becoming a reality and a powerful force. But, we have 15 different sets of established accounting standards and many different regulatory environments,’ Rake told company representatives from around Europe at the conference co-hosted by the International Accounting Standard Board and KPMG.
The move to IAS for all listed European companies will bring benefits for all. If successful, there will be a wider availability of capital in Europe at a lower cost, enhanced scope for cross-border transactions, improved investor relations and better performance measurements, he said.
Rake?s comments were echoed by Didier Pineau-Valencienne, chairman of the Association Francaise des Enterprises Privees.
‘If we’re going to be more and more global we should harmonise standards as quickly as possible so that companies have access to markets wherever they are,’ said Pineau-Valencienne.
Talking from a corporate perspective he said: ‘Access to equity is financial value of a company. This risks of seeing margins go up or down is the kind of information that is very useful to analysts so they can come up with realistic value of a company.’
Until recently the development of a single set of global standards and the European Commission’s decision to force all listed companies to use IAS by the latest 2005 has only attracted the interest of accountants and regulators.
But, yesterday Rake highlighted the need for boardroom level talks as the shift towards an equity culture accelerates. ‘We must see the move to IAS as a strategic issue rather than a mere accounting issue. Now is the time,’ he concluded.
Last year’s endorsement by Iosco, the club of global stock regulators, and the announcement by the European Commission to make all listed European companies use only IAS by 2005, has rapidly increased the impetus to have a single set of global accounting rules for Europe.
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