Finance chiefs’ call to usher in new accounting standards ahead of 2005 deadline

Date: 20/06/02

A LARGE majority of European company finance chiefs want to make the switch to international accounting systems before the 2005 deadline stipulated in a new EU regulation.

But national laws are stopping them, says a report by accounting firm Price- waterhouseCoopers (PwC).

PwC asked 650 chief financial officers if they would prefer to use the new standards ahead of 2005. More than 80 said 'yes'.

The London-based International Accounting (IAS) Standards Board rules are seen by finance ministers as a boon to capital markets because they mean investors will easily be able to compare performance between firms across the continent.

But Ian Wright, head of global corporate reporting at PwC, pointed out that only four member states - Austria, Belgium, Finland and Germany - currently allow listed companies to use the standards Europe wants the rest of the world, including the US, to recognise.

He said business ambitions 'are being hindered by national law'.

Wright added: 'We urge governments to remove any barriers to international convergence as quickly as possible so that companies wishing to use IAS before 2005 can do so.'

Despite the findings, the European insurance sector wants to delay introducing the rules until 2006 because many firms say they will not be ready to make the switch by 2005. Insurance firms say standards governing their sector have yet to be finalised.

A large majority of European company finance chiefs want to make the switch to international accounting systems before the 2005 deadline stipulated in a new EU regulation, but national laws are stopping them, according to accounting firm PricewaterhouseCoopers (PwC).