Accounting standards prepared for EU accession
An article appearing Monday in the UK’s Financial Times suggested that EU accession countries could find it difficult to comply with international accounting standards, as is required by 2005, but auditors in Malta confirmed that Malta was not one of those.
The head of the International Accounting Standards Board, Sir David Tweedie suggested that former Soviet bloc states and countries in the Mediterranean would find it difficult to come in line with the required standards.
Tweedie said: "If you head south in Europe and head east, that is where the problems are going to start. I am thinking of the Mediterranean areas and the former Soviet countries coming in." The only Mediterranean countries joining the EU are Malta and Cyprus, but it is evident that Tweedie must have been thinking of existing member states.
The Malta Financial and Business Times spoke to partners at Deloitte and Touche, and PricewaterhouseCoopers, who said Malta has long been in compliant with the standards. John Bonello, senior partner with PricewaterhouseCoopers said: "In his article Sir David Tweedie, did not specify as to which Mediterranean countries he was referring. After 1 May there will be eight EU countries with a Mediterranean coastline. If he was asked to name the countries I am sure he would have excluded Malta (and I am sure others like Cyprus) because compliance with International Accounting Standards (IAS) has been mandated on all companies in Malta by the Companies Act since 1995.
"Membership of the European Union will mean, as Sir David Tweedie said in his article, that by 2005 International Financial Reporting Standards (IFRS - the successors to IAS) will become obligatory on all companies that have to file or publish financial statements. Malta is ahead of the pack in this regard and I therefore see no reason why membership will present a problem – our accounting rules are already those that will apply in the EU next year."
Stephen Paris from Deloitte and Touche echoed Bonello’s words and said: "I do not think that this is an issue for Maltese companies as we have been bound to prepare accounts in accordance with International Financial Reporting Standards since the Companies Act was introduced in 1995.
"In fact Malta was one of the first countries to adopt the then IAS as the national standard."
In the article it is also stated that Tweedie wants companies to make greater use of fair or market values when reporting assets and liabilities, hitting on a subject that is the subject of much discussion and disagreement.