IASB to overhaul processes as further filing issues arise

THE BODY responsible for setting international reporting standards is to overhaul its governance processes in light of further shortcomings in its filing record at Companies House.

In a further embarrassment for the global standard setter, a review of its filing history has unearthed more irregularities, forcing it to clarify lines of responsibility and introduce various checkpoints to ensure that notifications are filed on time.

The IFRS Foundation, which oversees the work of the IASB, is facing a European Commission investigation into its compliance failings following a series of revelations that the global regulator had made late and inaccurate filings at Companies House.

In some instances, the Foundation informed Companies House about the termination of its directors many years after the action had taken place. Under the Companies Act 2006, UK companies are required to notify Companies House within 21 days when directors’ positions are terminated.

Earlier this month, it admitted that it failed to inform Companies House “on a timely basis” that certain directors had their positions at the organisation terminated, but claimed the introduction of new procedures in 2012 had corrected “historic anomalies” and that its list of “directors is fully up to date as of 31 December 2013”.

“We have identified additional historic filing shortcomings that are inconsistent with our initial public response, which was based on the best information available at the time,” it said its report on its compliance obligations.

“The foundation recognises that there have been historic omissions in its filing history at Companies House, and that filings have been late. The foundation regrets these administrative shortcomings and has undertaken remedial actions.”

European politicians had earlier raised “serious concerns” about the organisation’s governance and claimed its reporting irregularities were “unacceptable for a recipient of EU funding “. In a letter sent to EC internal markets commissioner Michel Barnier and seen by Accountancy Age, the MEPs called for the vote on the Foundation’s new funding package to be suspended until concerns over its reporting failings have been addressed.

Barnier has since said he “shared” the MEPs’ concerns and has “asked my services to further investigate the issues”. However, he called on the MEP’s to “reconsider” their position “on the financing programme”.

“The Commission services are in contact with that organisation and will examine the elements that will be provided to respond to the criticism expressed by MEPs,” a EC spokesperson told Accountancy Age.