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CESR publishes its first annual activity report on monitoring enforcement of IFRS in Europe.

23/09/2010

 
This Report provides an overview of the monitoring and enforcement of IFRS in Europe in the year to 31 December 2009 through the activities of the European Enforcement Co-ordination Sessions (“EECS”) under the auspices of the Committee of European Securities Regulators (CESR). The main objective of EECS is to co-ordinate the enforcement activities of member states in order to foster and maintain investor confidence.
 
Summarising the Report, CESR note that during 2009:
 
European enforcers performed a full review of around 1,200 companies’ accounts (annual and interim), covering in the region of 18% of listed entities in Europe. The coverage from one country to another varies because of the very different number of issuers across jurisdictions, the diversity in size and their risk profile.
 
The report shows, that around 900 enforcement actions were taken overall in Europe, out of which the EECS reviewed and discussed 170 cases further. The findings of these discussions both contributed to increased consistency amongst Member States enforcers in the actions taken which is encouraging. Of the 900 actions taken in Europe, in 19 of these cases, the issuer was required to issue revised financial statements. In around a further 160 cases the issuer was required to publish corrective notes or to make other public announcements. In approximately 560 actions corrections in future financial statements were required; and a further 170 cases resulted in other actions by enforcers, such as a notice to the issuer, without requiring any corrective action or public announcement.
 
IAASA is a member of the EECS and during the reporting year covered by the activity report:
 
  • Authority staff attended all 7 EECS plenary meetings and actively participated in the consideration of issues brought to the EECS by other members;
  • the Authority submitted 13 decisions to the database;
  • Authority staff presented 8 decisions to the plenary for discussion;
  • Authority staff submitted 2 emerging cases to the plenary for discussion;
  • presented 5 discussion papers to the plenary for discussion amongst members. The subject matter of those discussion papers included:
    • the impact of IAS 20 Accounting for Government Grants and Disclosure of Government Assistance and IAS 24 Related Party Disclosures on State participation in the ownership of banks and the impact ofNAMA;
    • FRS 3 Business Combinations and factors contributing to the recognition of goodwill;
    • IAS 1 Presentation of Financial Statements and the classification of bank loans in circumstances of non-compliance with loan covenants; and
    • IFRS 8 Operating Segments and the identification of Cash Generating Units for the purposes of impairment testing;
  • hosted, in conjunction with the Financial Regulator, a meeting of EECS in July, 2009 at Dublin Castle which was attended by representatives of EU accounting enforcers from 19 countries.
 
In addition to the Authority’s participation in plenary related matters, the Head of Financial Reporting Supervision is also:
 
  • a member of the EECS’ Agenda Group,
  • a member of the EECS’ Enforcement Methodology Group, and
  • a member of the EECS’ Enforcement Actions Group.
The Report can be accessed here.
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