The European Financial Reporting Advisory Group (EFRAG) is
seeking to strengthen the European contribution to the
international standard-setting process, using the group’s existing
structure as a starting point.
The group was established in 2001 to provide input to the
International Accounting Standards Board’s (IASB) standard-setting
process and advise the EC on the endorsement of IFRS. However, in a
document released for public consultation, EFRAG said that, due to
limited resources, it has focused less on proactively influencing
future standard-setting and more on responding to proposals.
EFRAG supervisory board chair Göran Tidström said as more
jurisdictions move towards IFRS, European input to the IASB’s
standard-setting process needs to be strengthened.
Stronger upstream input to the board’s agenda-setting process is
of particular importance, he said.
Additional human and financial resources will be required for a
process that should be based on balanced participation by all
relevant stakeholders, greater involvement of National Standard
Setters, and public accountability to EU institutions, Tidström
Discussions on increasing European influence on international
standard-setting have been taking place since the end of 2007.
A report from Member of European Parliament Alexander Radwan in
February this year warned that EFRAG as it stands does not “deal on
an equal footing with states whose structures are founded on the
centralised powers of regulators and supervisors” such as the US
and Japanese standard setters and regulators.
Radwan noted work on convergence is progressing and warned there
is a danger other large nations’ economies and company law
frameworks are being taken into account while EU frameworks play a
EFRAG has released a series of proposals on enhancing its
governance and operational structure. Comments on the proposals are
due by 22 September. It is hoped the new structure will be in place
during the first half of 2009.