Theodor Stolojan on the EU's programme to support specific activities in the field of financial reporting and auditing for the period 2014-2020. Speech delivered in the European Parliament on 12/03/2014
Thank you Mr President,
We are debating today, a Union programme to support specific activities in the field of financial reporting and auditing for the period 2014-2020.
The international financial reporting standards and international auditing standards are the bedrock of the comparability and transparency of company accounts throughout the Union. They are about the quality of the financial information in the decision making process.
The public money, EUR 43.2 million, will be used for the co-financing of three non profit organisations which deliver public goods:
a) The International Financial Reporting Standards Foundation, through which the International Accounting Standards Board develops international financial reporting standards;
b) The Public Interest Oversight Board which oversees international audit, ethics and education standards for the accounting profession;
c) The European Financial Reporting Advisory Group (EFRAG), the technical adviser of the European Commission, which assesses whether or not an IFRS standard complies with Union company law as part of the endorsement process of the Union.
During our work on this report, some important questions have arisen:
- The question of the prudence principle versus neutral one included into the conceptual framework and the principle that accounts should give “the true and fair view”;
- The question of independence of the standards issuers and the governance of these organisations;
- The need of the similarities and the differences between the IFRS standards and the US accounting standards;
- The EFRAG effectiveness ; the pro-active role and the governance of EFRAG;
It is not an easy task to answer to these questions. We found ourselves in an academic debate, a professional debate, and a political debate.
During the negotiations, together with the Council and the Commission, we reached a good compromise on this report.
We have clear commitments regarding:
a) The annual assessment of the work done by these three organisations;
b) The Commission’s report by 31 March 2014 on the EFRAG’s implementation of the Maystadt recommendations;
c) The Commission’s report by 31 December 2014 on IAS’ 8 years of experience in regulation implementation, and where appropriate the proposal for IAS regulation changes. This report will also refer to governance arrangements of the IFRS Foundation and IASB;
d) The IFRS Foundation and the IASB will take measures to disclose their interests, in order to avoid conflict of interests.
As the rapporteur on this dossier, it is my duty to thank to shadow rapporteurs for their contribution and support: El Khadraoui Said, Klinz Wolf, Giegold Sven, Kamall Syed and our assistants.
I also thank Commissioner Barnier who understood our concerns and made the right decisions.