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ESMA publishes report on EU accounting enforcement in 2020

06/04/2021

The European Securities and Markets Authority (ESMA) has today published its report “Enforcement and regulatory activities of European enforcers in 2020”.

The Report provides an overview of the activities of ESMA and of European accounting enforcers when examining compliance of financial and non-financial statements of European issuers. It presents further activities contributing to supervisory convergence and to development of a single rulebook in the area of corporate reporting.

EU accounting enforcers examined 729 financial statements drawn up under IFRS, covering some 17% of issuers listed on EU regulated markets. These examinations resulted in enforcement actions against 265 issuers to address material departures from IFRS, representing an action rate of 38%.

A further 132 enforcement actions resulted from the examination of non-financial statements (39 actions) and the presentation and disclosure of the alternative performance measures in management reports (93 actions).

ESMA’s efforts to increase supervisory convergence in 2020 focused on:

  • harmonising the enforcement of the application of IFRS 16 Leases and IFRS 15 Revenue from Contracts with Customers; and

  • promoting transparency on the impact of COVID-19 by issuing public statements on the implications of the pandemic on financial reporting and conducting a fact-finding exercise based on the half-year financial reports.

IAASA is an active participant in the ESMA-sponsored European Enforcers’ Co-ordination Sessions (EECS). The objective of EECS is to co-ordinate European enforcement activities in order to increase convergence amongst European national accounting enforcers and contribute to fostering investor confidence.

ESMA’s report can be accessed here.

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