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November 14, 2007

Bodies question EC measures

Bodies question EC measures

Three professional European bodies have warned that EC proposals on simplification in the areas of company law, accounting and auditing could worsen the business environment for European companies.

The European Federations of Accountants (Fédération des Experts Comptables Européens – FEE), European Federation of Accountants and Auditors, and the European Association of Craft, Small and Medium Sized Enterprises said EC proposals are based on the wrong assumptions and called on the EC to “promote, not demote” the single market model.

The three organisations refute the commission’s proposal to allow member states to exempt micro-companies from the Fourth Company Law Directive which serves as the harmonised basis for establishing and publishing business accounts. They said that assimilating accounting to an administrative burden is contrary to business reality.

FEE chief executive Olivier Boutellis-Taft explained: “Accounting rules are management tools, not administrative burdens. A European framework for company law and accounting is essential to ensure sustainable growth of SMEs and enable small entrepreneurs to seize the opportunities of a single market.”

Another concern the group expressed relates to the quality and independence of certain impact assessments. They stressed that robust methodology and data were essential and that costs and benefits should be taken into account.

The group claimed the EC has not properly evaluated the consequences of a reduction of accounting on the impact of transparency and comparability.

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