EU programme to support financial reporting and auditing

 

SUMMARY OF:

Regulation (EU) No 258/2014 establishing an EU programme supporting specific activities in the field of financial reporting and auditing for the 2014-2020 period

WHAT IS THE AIM OF THE REGULATION?

It sets up an EU programme to support the activities of bodies which contribute to the achievement of the EU’s policy objectives in relation to financial reporting and auditing.

KEY POINTS

The regulation covers the period from 2014 to 2020 and sets out rules for the allocation of an initial amount of €43.18 million from the EU’s budget to help develop international financial reporting and auditing standards. Regulation (EU) 2017/827 amended the original regulation increasing the total financial allocation for the programme to €57.007 million.

Following the economic and financial crisis of 2008, it became clear that the issue of financial reporting and auditing needed to be addressed and it became central to the EU’s political agenda. Well-functioning common financial reporting rules are essential for:

• the EU’s internal market;
• the effective functioning of the capital markets; and
• the achievement of an integrated market for financial services in the EU.

The programme was designed to contribute to the objectives of:

• ensuring comparability and transparency of company accounts throughout the EU;
• ensuring the global harmonisation of financial reporting standards by promoting the international acceptance of International Financial Reporting Standards;
• promoting convergence and high-quality international standards for auditing in all EU countries.

The programme covers:

• the activities of developing or providing input to the development of standards;
• activities relating to applying, assessing or monitoring standards or overseeing standard-setting processes in support of the implementation of EU policies in the field of financial reporting and auditing.

The beneficiaries are:

• in the area of financial reporting:
  • the European Financial Reporting Advisory Group (EFRAG) (€23.134 million)
  • the International Financial Reporting Standards (IFRS) Foundation (€31.632 million);
• in the area of auditing:
  • the Public Interest Oversight Board (PIOB) (€2.241 million).

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 1 January 2014.

BACKGROUND

In 2009, the EU launched a programme to support activities in the fields of financial reporting and auditing. The beneficiaries were the IFRS Foundation, EFRAG and the PIOB. The programme was extended in 2014 for the period 2014-2020 for IFRS Foundation and the PIOB but, for EFRAG, the European Parliament and the Council decided to wait until certain reforms were made to EFRAG’s governance. These governance reforms were implemented in October 2014 thus paving the way for the EU to increase its contribution to EFRAG.

MAIN DOCUMENT

Regulation (EU) No 258/2014 of the European Parliament and of the Council of 3 April 2014 establishing a Union programme to support specific activities in the field of financial reporting and auditing for the period of 2014-20 and repealing Decision No 716/2009/EC (OJ L 105, 8.4.2014, pp. 1-8)

Successive amendments to Regulation (EU) No 258/2014 have been incorporated into the original document. This consolidated version is of documentary value only.

last update 04.04.2019