Consistent Application of IAS on European on Companies Essay

Consistent Application of IAS on European on Companies - Essay ExampleThe Europe sum has been aiming to have an efficient crown market (Toporowski, 2000 Davis, 1997 Dermine and Hillion, 1999) for its Member States done an efficient and effective financial information system in a transparent European capital market even prior to the Enron scandal in 2002. The subsequent US scandals in securities market whitethorn have triggered the early comeion of IAS in 2002 to require its application to completely listed companies in Europe as of 2005. For EU, the issue of efficient capital market is of course broader than the issue of these international standards. Attainment of EUs purpose therefore under this field is part of its desire for economic advantages (Carroll, Thomas, 1983 Slavin, 1996 Samuelson and Nordhaus, 1992) of its member states in the spheric economy as it hastens its economic integration (Graetz, et. al, 2006 Halkos and Salamouris, 2003, European Economic Integration, 19 94). The Enron scandal can non be separated from the loser of the US generally accepted accounting principles (generally accepted accounting principles) on financial reporting (Choi and Fisch, 2003) that became the basis for the European Union (EU) members to be unable to find their trust on said accounting rules and conventions. Persuading the US to change its GAAP with the IAS due to ineffectiveness of the former in the Enron scandal is part of the process. With European Commission having urged the SEC to adopt IAS in February 2002, an overwhelming ad picking of the IAS by European Parliament in March 13, 2002 was evident by a vote of 492 for, 5 against and 29 abstentions. The European Parliament endorsed the Commissions proposal for all EU listed companies to follow standards issued by the International Accounting Standards Board in their consolidated financial statements not latter than 2005. Non-listed companies on the other hand were permitted to decide whether to adopt IAS. Member States were also given the option to exempt some companies temporarily from IAS requirement under some cases until 2007. The option is only available in the case listed companies in the EU and in on a non-EU exchange and are following other set of internationally accepted standards and in the case of companies that have only publicly traded debt securities (Deloitte Touche Tohmatsu, 2008e).