Chapter3ComparativeAccounting:EuropeDiscussionQuestions1.RegulatingandenforcingfinancialreportingisagovernmentfunctioninFrance.TheNationalAccountingBoard(CNC)andtheAccountingRegulationcommittee(CRC)setaccountingstandardsunderthejurisdictionoftheMinistryofEconomyandFinance.TheFinancialMarketsAuthority(AMF)ensurescompliancewithFrenchaccountingrules(forlistedcompanies).Itisalsoagovernmentagency.PublicandprivatesectorbodiesareinvolvedintheregulationandenforcementoffinancialreportinginGermany.TheGermanAccountingStandardsBoardisaprivatesectorbodythatdevelopsGermanreportingstandardsforconsolidatedfinancialstatements.However,Germanlaw(theHGB)governsfinancialstatementsattheindividualcompanylevel.Enforcementalsoinvolvesprivateandpublicsectorbodies.TheFinancialReportingEnforcementPanelisaprivatesectorbodythatinvestigatescomplianceandreliesoncompaniestovoluntarilycorrectanyproblemsthatitfinds.MattersthatcannotberesolvedarereferredtotheFederalFinancialSupervisoryAuthority,agovernmentagency,forfinalresolution.TheregulationandenforcementoffinancialreportingisinthepublicsectorintheCzechRepublic.TheMinistryofFinanceisresponsibleforsettingaccountingprinciplesanditalsooverseestheCzechSecuritiesCommissionwhichisresponsibleforenforcingcompliancewithCzechrequirements.SomeobserversquestiontheeffectivenessoftheCzechsystem.AprivatesectorgroupisresponsibleforregulatingfinancialreportingintheNetherlands.TheDutchAccountingStandardsBoardissuesguidelinesonacceptableaccountingprinciples.EnforcementishandledbytheEnterpriseChamber,aspecialaccountingcourt.Itrulesonwhethercompanieshaveusedacceptableaccountingpractices,butonlyafteraninterestedpartyhasbroughtacomplaint.TheFinancialReportingSupervisionDivisionoftheNetherlandsAuthorityforFinancialMarketsisresponsibleforenforcingreportingrequirementsforlistedcompanies.RegulationoffinancialreportingisintheprivatesectorintheUnitedKingdom.TheAccountingStandardsBoarddeterminesFinancialReportingStandards.TheauthorityoftheASBissetoutinthelaw.Twogroupsareresponsibleforenforcingfinancialreportingstandards,oneintheprivatesectorandtheotherinthepublicsector.TheFinancialReportingReviewPanel(privatesector)andtheDepartmentofTradeandIndustry(publicsector)caninvestigatecomplaintsaboutdeparturesfromaccountingstandards.Ifnecessary,theycangotocourttoforcecompaniestoreviseitsfinancialstatements.2.GiventherequirementthatallEUlistedcompaniesmustuseInternationalFinancialReportingStandardsintheirconsolidatedfinancialstatements,allfivecountriesfollowfairpresentationprinciplesforthisgroupofcompanies’financialstatements.Thedifferenceamongthecountriescomeswithlistedcompanies’individualfinancialstatementsandwithnon-listedcompanies.Theoverallpictureisquiteconfusing.Attheindividualcompanylevel,FranceandGermanyrequirelocalaccountingstandards.Bothcanbecharacterizedaslegalcompliance,conservative,andtax-driven.IndividualcompanyfinancialstatementsintheNetherlandsandUnitedKingdommayuseeitherlocalrequirements1orIFRS.However,ineithercasetheresultisfairpresentationfinancialstatements.TheCzechRepublicrequiresIFRSinlistedcompanies’individualcompanyfinancialstatements,sotheresultisthattheyarefairpresentation.Inallfivecountries,non-listedcompaniesmayuseeitherIFRSorlocalaccountingstandardsfortheirconsolidatedfinancialstatements.Ascharacterizedabove,theresultingfinancialstatementswillbequitedifferentf...
