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 added.
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 lesser role.
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.