EC Tightens Procedures On Accounting And Auditing Oversight

by Lorys Charalambous, Tax-News.com, Cyprus

28 January 2009

The European Commission has this week adopted a set of decisions to strengthen the supervisory framework for EU financial markets, in order to improve supervisory cooperation and convergence between Member States and to reinforce financial stability.

Under the new rules, the three committees that supervise, respectively, the securities, banking and insurance sectors will benefit from a clearer operational framework and more efficient decision-making processes. In addition, the Commission proposes that these committees, as well as key bodies involved in the standard-setting process for financial reporting and auditing at both EU and international level, should be provided with financial support from the EU budget so that they can achieve their objectives as rapidly and efficiently as possible.

The proposal for financial support now passes to the Council and the European Parliament for consideration.

Internal Market and Services Commissioner Charlie McCreevy said: "The financial crisis has demonstrated the need to further strengthen EU supervisory arrangements and has reminded us of the importance of transparency and independence, especially when setting financial reporting and auditing standards. An essential move in this direction is to reinforce the role of key bodies in these fields, at both European and international level, and to provide them with financial support."

"Additional reforms may be needed in relation to the EU supervisory framework, in particular in the light of the forthcoming recommendations of the High Level Expert Group chaired by Jacques de Larosière and other work under way."

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