Accountancy body warns over flood of EU legislation

Merrell, Caroline
March 2004
Management Services;Mar2004, Vol. 48 Issue 3, p10
Academic Journal
This article reports on the potential difficulty faced in the implementation of financial legislation in the European Union in 2004. Mary Keegan of the British Accounting Standards Board said that the estimated 14 pieces of legislation could prove to be too much to cope with. Eight directives will be introduced, significantly increasing the burden on financial services companies. In his speech as chairman of the Financial Services Authority (FSA), Callum McCarthy said that he favoured slowing down the legislative process to give more time to get their systems in order. He added that each directive will require financial institutions to make substantial efforts to prepare for implementation. They will need to install new information technology systems, train staff, change managerial processes and bring in external consultants. Keegan said that there could be an argument for slowing down the financial services action plan, but said that it was imperative that common accounting standards for listed companies were implemented by 2005. McCarthy also pointed out the legislation was not subject to the same continuing cost-benefit analysis as the rules of the FSA. It is the absence of the process in a European context which has contributed to the surfacing of the problems of implementation.


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