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CESR publishes selected information from its database of enforcement decisions taken by EU/EEA national supervisors of financial information

Monday, 16th April, 2007: The Committee of European Securities Regulators (CESR) has today published extracts from its database of enforcement decisions taken by EU/EEA national supervisors of financial information that participate in the European Enforcer Co-Ordination Sessions (EECS). EU/EEA national supervisors monitor and review the financial statements of issuers and consider whether they comply with IFRS and other applicable reporting requirements, including relevant national law.

 

As proposed in CESR Standard No 2 on Financial Information, ‘Co-Ordination of Enforcement Activities’, CESR has developed a confidential database of enforcement decisions taken by individual EU/EEA national supervisors as a source of information to foster appropriate application of IFRS. In response to public comment to the Standard, CESR has committed to publish extracts of the database to provide issuers and other users of financial information with similar assistance.

 

The EECS is a forum in which all EU/EEA national supervisors of financial information, whether CESR members or not, meet to share the reasons underpinning their accounting enforcement decisions, canvas members’ views on issues currently being dealt with and to identify issues which do not appear to be covered by financial reporting standards or which may be affected by conflicting interpretations for referral to standard setting or interpretive bodies such as the IASB or IFRIC.

 

EECS is not a decision-making forum. It neither approves nor rejects decisions taken by EU National Supervisors. Publication of enforcement decisions will inform market participants about which accounting treatments EU national supervisors may consider as complying with IFRS, i.e. whether the treatments are considered as being within the accepted range of those permitted by the standards or related interpretations. Such publication, together with the rationale behind these decisions, will contribute to a consistent application of IFRS in the European Union.

 

Decisions that deal with simple accounting matters, or oversight of IFRS requirements, will not normally be published, even where they are material breaches leading to sanctions. Published decisions will generally include a description of the accounting treatment or presentation at issue, the decision taken by the relevant EU national enforcer and a summary of the enforcer’s underlying rationale. In response to concerns about confidentiality and privacy laws, which vary between EU jurisdictions, extracts will not usually include the name of the issuer or the enforcer or any other details that would enable the issuer or its jurisdiction to be identified.

 

For the reasons set out above, CESR anticipates publishing further extracts from the database on a regular basis. The current extracts can be assessed by clicking here.

 

The Irish Auditing and Accounting Supervisory Authority is a member of, and actively participates in, the EECS. In addition to its membership of the EECS proper, the Authority is also a member of the EECS’ Agenda Group. Accordingly, in addition to contributing to the Group’s plenary meetings, the Authority has a direct input to, and involvement in:

 

  • the review of emerging cases and decisions as tabled by Member States’ enforcement authorities with a view to assessing those which should be afforded priority for consideration and discussion at the plenary; and
  • the review of enforcement decisions taken by EU/EEA accounting enforcers with a view to determining whether they should be published.

Note: In some EU jurisdictions national supervisors may provide an opinion on a particular accounting issue before an issuer’s accounts have been finalized and published (this is not the regime operating in Ireland). These “pre-clearance decision” are made on the basis of information and assumptions supplied by the issuer to provide the context for the question and which may not be challenged by the enforcer. These pre-clearance decisions are identified as such in the published version.