EU to fund supervisory bodies for accounting, auditing

Special Report:Global Financial Crisis

BRUSSELS, Jan. 26 (Chinese media) -- The European Commission (EC) proposed on Monday that supervisory bodies for accounting and auditing should be funded to reinforce financial stability.

EU funding for the IASCF (International Accounting Standards Committee Foundation), the PIOB (Public Interest Oversight Body), and the EFRAG (European Financial Reporting Advisory Group) could help keep these supervisory bodies away from unclear funds, according to EU spokesman Oliver Drewes.

"We think that it is important that there is independent financing of these types of organizations so that they don't rely on unclear funds or funds which are maybe given by people involved in their type of decision-making," he said to the media.

The proposed funding, a total of 36.2 million euros for three years, is pending for the approval of EU member states and the European Parliament.

The IASCF, which sets global IFRS accountancy standard used widely in Europe, would be funded with 15 million euros, while the PIOB, regulating global accountancy auditing and ethics standards, would get 1.2 million euros.

The EFRAG, which provides advice for the EC on using the IFRS rules in Europe, would get 12 million euros.

The fund would also be used to train staff and manage IT projects at three major public sector groups of financial supervisors, namely the Committee of European Securities Regulators, the Committee of European Banking Supervisors, and the Committee of European Insurance and Occupational Pensions Supervisors.

"The financial crisis has demonstrated the need to further strengthen EU supervisory arrangements and has reminded us of the importance of transparency and independence, especially when setting financial reporting and auditing standards," said Internal Market and Services Commissioner Charlie McCreevy.

He said an essential move in this direction "is to reinforce the role of key bodies in these fields, at both European and international levels, and to provide them with financial support."

According to McCreevy, a high level expert group, chaired by former Banque de France governor Jacques de Larosiere, is set to be recommended to be set up as "additional reforms" needed in relation to the EU supervisory framework.