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Thursday, 24 April 2008 - Strasbourg OJ edition

International Financial Reporting Standards and the governance of the International Accounting Standards Board (debate)

  Gay Mitchell (PPE-DE). - Madam President, I commend my colleague Mr Radwan for a very well written report. I hope the Bavarian national dress he is wearing here this morning is not indicative of a change in political direction.

The adoption of the IFRSs in January 2005 has brought great benefits to the European Union by making accountancy requirements simpler across borders and financial statements easier to compare across countries, competitors and industries, enhancing the work of regulatory oversight, banking and capital markets. International financial reporting standards are now being used or are being adopted in more than a hundred countries, including Australia, South Africa and others.

I support the calls for increased transparency, effectiveness and accountability over the IASB. The report points to the fact that 17 months had passed before the IASB appointed a new chairperson. This cannot be acceptable. The IASB is a private, self-regulatory body which has been given the role of rule-maker and it is only right that we demand increased accountability and oversight because of that. We should also be careful about calling for the establishment of extra EU structures to deal with the interpretation and application of IFRS standards. Why is it needed? What will it do?

On the subject of EU-US convergence, there has been great progress made in this area and in the EU-US accounting road map. Last year, the US President, the President-in-Office of the European Council and the President of the European Commission signed a joint EU-US statement which undertook to promote and to seek to ensure conditions for the US generally accepted accounting principles and the IFRSs to be recognised in both jurisdictions. This is very welcome.

With regard to the application of the IFRSs to SMEs, SMEs are small and smaller. I feel it might be better to make it optional so as to ensure flexibility, rather than prevent its application outright.

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