Author (Person) | Chapman, Peter |
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Series Title | European Voice |
Series Details | Vol.8, No.7, 21.2.02, p16 |
Publication Date | 21/02/2002 |
Content Type | News |
Date: 21/02/02 By THE EU's switch to international accounting standards by 2005 will help the Union avoid Enron-style bankruptcies, the MEP in charge of vetting the move said this week. British Tory Lord Inglewood, the Parliament's rapporteur on the issue, said Enron executives would have been unable to conceal huge losses from its balance sheet if its accounts had been drawn up in accordance with rules set by the London-based International Accounting Standards Board [IASB] instead of US ones. 'A lot of what happened to Enron could not have happened if International Accounting Standards [IAS] were adopted and applied instead of...the US system they were applying,' said Inglewood. 'Because IAS don't prescribe precisely what you have got to do, it's a matter of assuring that certain principles are adhered to - that would have scuppered a lot of the Enron stuff.' Inglewood also said he saw no conflicts of interest despite reports that the IASB, which would in future write the rules for EU firms listed on stock exchanges, had approached big corporations, including Enron, for funding. He said helping to fund the board would in no way influence the way it takes its decisions. 'It has got to pay its way. The big corporations want the IASB to exist. It makes for greater international transparency - but I don't think they are trying to rig it to get what they want.' Inglewood's comments came ahead of a vote next week on the issue by the Parliament's legal affairs committee. EU member states reached a preliminary deal on the accounting standards issue last December, supporting the call for a switch to IAS for listed firms by 2005, although they sought more time for firms who currently file accounts according to US standards. Inglewood said a majority of MEPs would agree to this compromise - although he admitted some, including Germany's Klaus Heiner-Lehne, want to secure more oversight of IASB decisions. Their concerns echo recent worries that MEPs would be shut out of the process for reforming EU securities markets, under proposals tabled by Belgium's Alexandre Lamfalussy. After months of wrangling with the European Commission, MEPs finally thrashed out a deal earlier this month giving them more powers to voice concerns over detailed secondary legislation agreed by an unelected securities committee. Inglewood said the accounting standards issue should not become embroiled in a Lamfalussy-style debate. 'I am not saying that it should be a matter of the things going through unscrutinised by the European Parliament...but I don't think it's exactly on a par with Lamfalussy. What you can't do is join the international system and at the same time go home and do your own thing at European level,' he said.
The EU's switch to international accounting standards by 2005 will help the Union avoid Enron-style bankruptcies, according to Lord Inglewood, the MEP in charge of vetting the move. |
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Subject Categories | Law |
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