Article 9 Evaluation
United Kingdom
By 31 March 2014, the Commission shall submit a first report to the European Parliament and to the Council on necessary governance reforms in the area of accounting and financial information in respect of EFRAG, taking into account, inter alia, the developments following the recommendations set out in the special advisor’s report, and on the steps that EFRAG has already taken to implement those reforms.
By 31 December 2014, the Commission shall submit a report to the European Parliament and to the Council on the findings of the Commission’s evaluation of Regulation (EC) No 1606/2002 including, where appropriate, proposals for amending that Regulation with a view to improving its functioning, as well as on governance arrangements for all relevant institutions.
From 2015, the Commission shall prepare an annual report on the activity of the IFRS Foundation as regards the development of IFRS, of PIOB and of EFRAG.
With regard to the IFRS Foundation, the report referred to in paragraph 3 shall cover its activity and in particular the general principles against which new standards have been developed. The report shall also cover whether IFRS take due account of different business models, reflect the actual consequences of economic transactions, are not overly complex, and avoid artificial short-term and volatility biases.
Following the issuance of the revised Conceptual Framework, the report shall address any changes that have been introduced in the Conceptual Framework, with a particular focus on the concepts of prudence and reliability.
With regard to the IFRS Foundation and the IASB, the report referred to in paragraph 3 shall also assess their governance, in particular in terms of transparency, the prevention of conflicts of interest and the diversity of experts, and the steps that have been taken to ensure broad representation of interests and public accountability.
In addition, with a view to ensuring high-quality accounting standards and high standards of transparency, accountability and integrity, the report shall identify and assess actions taken within the IFRS Foundation which, inter alia, concern public access to documents, open dialogue with European institutions and various stakeholders, rules on transparency of stakeholders' meetings, and the establishment of transparency registers.
With regard to PIOB and its successor organisation, the report referred to in paragraph 3 shall cover developments in the diversification of funding and shall assess how the work of PIOB contributes to the enhancement of audit quality, including the integrity of the auditing profession. If funding by the IFAC in a given year reaches more than two thirds of the total annual PIOB funding, the Commission shall propose to limit its annual contribution for that year to a maximum of EUR 300 000 .
With regard to EFRAG, the report referred to in paragraph 3 shall cover the following:
whether EFRAG in its technical work on international accounting standards takes appropriate account of the requirement of Article 3(2) of Regulation (EC) No 1606/2002, in particular, in assessing whether new or amended IFRS are consistent with the ‘true and fair view’ principle and conducive to the European public good;
whether EFRAG in its technical work on IFRS provides adequate assessment of whether draft, new or amended international accounting standards developed by the IASB are evidence-based, respond to the Union’s needs, taking into account the diversity of accounting and economic models and views in the Union; and
EFRAG’s progress in the implementation of its governance reforms, taking into account developments following the recommendations set out in the special advisor’s report.
If appropriate, the Commission shall submit a legislative proposal to continue financing of EFRAG after 31 December 2016.
With regard to EFRAG, the report referred to in paragraph 3 shall assess as of 2018:
whether the expanded public good criterion as recommended in the special advisor's report has been respected during the endorsement process undertaken during the previous year;
whether the European Parliament and the Council have been involved at an early stage when developing financial reporting standards, in general, and in the endorsement process in particular;
whether the EFRAG financing structure is sufficiently diversified and balanced to enable it to accomplish its public interest mission in an independent and efficient manner; and
the governance of EFRAG, in particular in terms of transparency, and the steps that have been taken to ensure broad representation of interests and public accountability.
In addition, it shall identify and assess the actions taken within EFRAG in order to ensure high standards of democratic accountability, transparency, and integrity which, inter alia, concern public access to documents, open dialogue with European institutions and various stakeholders, the establishment of mandatory transparency registers and rules on transparency of stakeholders' meetings as well as internal rules, in particular prevention of conflict of interests.
The Commission shall transmit the report referred to in paragraph 3 to the European Parliament and to the Council no later than 30 June each year.
No later than 12 months before the end of the Programme, the Commission shall submit to the European Parliament and to the Council a report on the achievement of the Programme’s objective. That report shall appraise at least the overall pertinence and coherence of the Programme, the effectiveness of its execution and the overall and individual effectiveness of the beneficiaries’ work programme in terms of achievements of the objective referred to in Article 2.
The Commission shall send the reports referred to in this Article to the European Economic and Social Committee for information.
Annotations
Textual amendments
- F1
- F2