As 2005 – the deadline for European companies to adopt global accounting standards – looms large, rule-setters are turning their mind to the tricky question of enforcement.
But it seems that they have a trick or two up their sleeves.
Discussing the issue at a Paris conference last week, Sir David Tweedie (pictured), chairman of the International Accounting Standards Board, and Karel Van Hulle, head of financial reporting at the European Commission, agreed that all it would take is just one good scandal to guarantee future enforcement.
Indeed, Sir David suggested Europe use a similar tack to that taken by the UK’s Financial Reporting Review Panel 10 years ago.
When the organisation, which enforces accounting rules, was first set up, officials hung up a noose outside. ‘One good sacrificial auditor and we had very few problems afterwards,’ quipped Sir David. ?: