Europe accounting standards enforcement body Essay

362 WordsSep 28, 20082 Pages
It seems the main reason that there is no pan –Europe accounting standards enforcement body in Europe is due mainly to the cross boarder regulations and political / financial reasons and cultures. Each country in the EU has their own enforcement body such as stock exchanges, government departments or private sector bodies to carry out the enforcement of financial reporting rules but this creates confusion for investors, the question is where is the harmonization and the convergence? With the adoption of IFRS in Europe, this should be a key driver towards a fully integrated European capital market by facilitating comparability of financial information across the EU. The Investor need to understand each countries structure, or frame work before they make any decisions in investing. To simplify matters you need a body that provides consistency in regulating and enforcing the one set of rules. You need an independent body to be a watchdog. I know that it is difficult to establish with many obstacles to overcome, such as having countries of the EU to comply. I believe that if there was a pan-Europe accounting standards enforcement body, established it would improve market efficiency within the EU. It is a logical step forward, which will enhance integrity, and reduce cross-border regulations. Paul Volcker, former Chairman of the US Federal Reserve Board and current chairperson of the IASC Foundation Board of Trustees summed up the case for global convergence of financial reporting standards: stated: “If markets are to function properly and capital is to be allocated efficiently, investors require transparency and must have confidence that financial information accurately reflects economic performance. Investors should be able to make comparisons among companies in order to make rational investment decisions. In a rapidly globalising world, it only

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