Consistent Application of IAS on European on Companies Essay

Consistent Application of IAS on atomic number 63an on Companies - Essay ExampleThe Europe Union has been aiming to have an efficient capital market (Toporowski, 2000 Davis, 1997 Dermine and Hillion, 1999) for its outgrowth States through an efficient and effective financial information system in a transparent European capital market even prior to the Enron crap in 2002. The subsequent US scandals in securities market may have triggered the early adoption of IAS in 2002 to require its application to all 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 business line is part of its desire for economic advantages (Carroll, Thomas, 1983 Slavin, 1996 Samuelson and Nordhaus, 1992) of its member states in the global economy as it hastens its economic integration (Graetz, et. al, 2006 Halkos and Salamouris, 2003, European Economic Integr ation, 1994). The Enron scandal cannot be degage from the failure of the US generally accepted accounting principles (GAAP) on financial reporting (Choi and Fisch, 2003) that became the basis for the European Union (EU) members to be unable to find their put 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 due south to adopt IAS in February 2002, an overwhelming adoption 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 gi ven the option to exempt some companies temporarily from IAS prerequisite 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 followers another set of internationally accepted standards and in the case of companies that have only publicly traded debt securities (Deloitte Touche Tohmatsu, 2008e).