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EC ends ICAEW/Mazars IFRS contract

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25th Feb 2014
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The European Commission terminated a €149,800 (£123,391) joint contract it awarded to Mazars and the ICAEW to investigate the impact of IFRS in the EU after just a month.

The one-year contract was awarded to the institute and accountancy firm jointly in January. The project required a general analysis of the impact of eight years’ application of IFRSs in the EU.

But after MEP and chair of the European Parliament’s ECON committee Sharon Bowles complained to internal markets commissioner Michel Barnier about potential conflicts of interest, the contract was ended this week.

In the letter, Bowles expressed concerns that former Mazars France partner Francoise Flores is chairwoman of the European Financial Reporting Advisory Group, the Telegraph reported.

She added that the ICAEW’s main taskforce includes representatives of the Big Four and IASB members.

A spokesman for Bowles was unable to provide a full copy of the letter and said the Telegraph had not received the letter from the MEP herself.

Commissioner Barnier said in a statement that he had taken note of the “serious concerns” expressed by MEPs about the choice of contractor for the commission’s evaluation of international standards and the regulation and governance of the IFRS Foundation.

A spokesman told AccountingWEB: “He attaches great importance to the quality of this evaluation of the 10 years of application of the IAS regulation which the commission services have decided to carry out.

“This is the first comprehensive review of the EU accounting framework for listed companies. No doubt can be cast on the conditions under which it will be performed. Noting the concerns expressed, he considered that it was appropriate to review the methods to be used when performing that important evaluation.

“As regards the IFRS Foundation, the commission services are in contact with that organisation and will examine the elements that will be provided to respond to the criticism expressed by MEPs,” the commission spokesman added.

The ICAEW and Mazars released a joint statement strongly rejecting any suggestion their involvement may have compromised the independence of the study.

“Mazars and ICAEW successfully bid for this project during an open, transparent and competitive tendering exercise. Each of us has a long and successful track record of delivering on these kinds of public interest projects with integrity and impartiality,” a spokesperson said.

In addition, both organisations have been given written assurance by the EC that the termination doesn’t call into question their competency or independence.

If it went ahead, the study would have included a cost-benefit analysis of the Regulation 1606/2002 of the European Parliament and the Council ('IAS Regulation') for the different stakeholder groups of the private sector (preparers and users of financial accounts).

It would also have supported DG MARKT's objective to proceed with the in-depth evaluation of the IAS Regulation, to assess whether the implementation of the IFRSs in the EU has provided the expected benefits.

No official word has been recieved about whether it would be retendered.

Replies (3)

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By carnmores
26th Feb 2014 12:09

more waste of money

one would hope that ICAEW for all its myriad faults would be a good place to start especially in conjunction / counter balanced by a mid tier form (if thats not insulting) to Mazars. what axe has this woman got to grind?

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By Char
26th Feb 2014 11:42

Good call!

Finally someone realises our associations are dominated by the Big Four and only their interests.  Good call in my opinion.

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By BRIGHTAMEDODAH
11th Mar 2014 13:59

Insult of Terminology

If the termination did not call into question the competence and independence of the ICEAW and Mazars why was it a potential conflict of interest?

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