EU and Global Private Regulatory Regimes: The Accounting and Auditing Sectors

Abstract

In the accounting and auditing sectors, the EU tried to put in place a common model, enforcing private standards: the international accounting standards (IAS/IFRs), established by the International Accounting Standard Board (IASB), and the international standards on auditing (ISA) set by the International Auditing and Assurance Standards Board (IAASB). EU strategy aims at avoiding a delegation of its regulatory power in two ways: first, controlling the access of international standards within the EU legal order through an endorsement procedure; second, attempting to influence the international standard setting process. The implementation process in the accounting area (in particular, the endorsement of IAS 39) proves that endorsement can act as a filter, but that there are growing pressures threatening to impair its functioning. Moreover, changes in the structure of the IASB following to the global financial crisis challenge the EU’s efforts to influence IASB. In the auditing area, EU strategy – which has not yet been enacted – seems more likely to succeed, mostly because of the weaker political interest in this area. Additionally, the composition of the body monitoring the IAASB, which dates back to a period preceding the crisis, is more favorable to the EU.