EC Establishes Expert Group To Advise On Accounting Standards

by Ulrika Lomas, for LawAndTax-News.com, Brussels

19 July 2006

The European Commission announced on Monday that it has established a Standards Advice Review Group in the area of accounting to ensure objectivity and proper balance regarding the European Financial Reporting Advisory Group's (EFRAG) opinions.

The Group will be composed of independent experts and high-level representatives from national standard setters, whose experience and competence in accounting are widely recognised. The Group's task will be to assess whether the endorsement advice given by the EFRAG is well balanced and objective. The group will deliver its advice normally within three weeks.

Internal Market and Services Commissioner Charlie McCreevy explained that:

"The Standards Advice Review Group will be an important element of the EU’s accounting standards architecture. By delivering independent advice on EFRAG’s recommendations it will give extra assurance that the accounting standards adopted in the EU are of the highest quality."

The European Financial Reporting Advisory Group (EFRAG) was founded by the organisations representing preparers, users and accountancy profession to provide opinions to the Commission on whether proposed accounting standards comply with EU requirements and are suitable for adoption.

As EFRAG is a private body, however, it is important for the high quality, transparency and credibility of the endorsement process to establish appropriate institutional infrastructure ensuring that its endorsement advice is objective and well-balanced.

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