|Series Title||European Voice|
|Series Details||Vol.7, No.30, 26.7.01, p15|
RAISING the topic of international accounting standards may not guarantee another invitation from a dinner party host. But utter the same words to boardroom bosses and you will be shot more knowing glances than blank looks. A recent meeting of European and Japanese industrialists including Bertelsmann chief Thomas Middlehoff and Toyota's Hiroshi Okuda called on regulators to accept the need for globally compatible norms for financial reporting. Etienne Davignon - European chairman of the EU-Japan Business Dialogue Round Table - made no apologies for placing the issue as their number-two priority behind the need to make the Kyoto protocol a success. In an interview with European Voice, former Commission vice-president Davignon said accounting standards are vital for industry as capital markets globalise and companies hop from one stock market to another. "This is a very important issue," he said. "If European companies were also quoted in the US or
Japan, they would have to present two different sets of accounts." The European Commission supports global acceptance of norms developed by the London-based International Accounting Standards Board (IASB). It has launched a draft regulation which would force all listed companies to use them in their principal financial reports by 2005. But doubts remain whether the US and Japan will fully embrace them or prefer to guard their long-established national standards. If they are not accepted, companies listed in more than one market would be forced to fund compliance with local norms. Even if the new standards win broad support, Davignon said there was still a risk that the big trade blocs might pick and choose which ones to accept, and how they should be applied. The Commission has launched an independent body to examine draft international standards. This European Financial Reporting Advisory Group (EFRAG), chaired by
Dutchman Johan van Helleman, will also have a voice on the IASB. Helleman aims to help the Union executive change EU accounting directives and offer guidance on interpreting international norms.