Françoise Flores, Chairman of EFRAG

1. European perspective on the integration of accounting Françoise Flores, Chairman of EFRAG Warsaw, 29 November 2011

2. IFRS in Europe • Decision to adopt made in 2002, first IFRS accounts published in 2005 • Mandatory for consolidated accounts of all listed companies in the EU • Option available for individual accounts or consolidated accounts of non-listed companies • IFRS become European law, once adopted EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

3. IFRS as adopted in the EU • Endorsement process • Complexity or democracy? • Meant to safeguard against major flaws, not an approval process: • IFRS not contrary to the true and fair view • Compares favourably with other adoption processes • All potential difficulties must have been resolved upstream EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

4. Endorsement Performs scrutiny EU PARLIAMENT Vote / Approval ACCOUNTING REGULATORY COMMITTEE -ARC EU COMMISSION COUNCIL OFMINISTERS SARG Advice IFRS/Interpretations EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

5. IFRS in Europe • Accounting standards fully harmonised in one go in the EU • Quality and credibility of financial reporting have improved significantly • No other credible alternative • EU bet on global standards about to be won? EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

6. It’s all about influence!! EFRAG A leading force in the global financial reporting debate EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

7. Wheneveryonewants to be the leader… A F B S PAFA GLASS EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

8. Tasks for regional and national groups • Recommendations for agenda items • Pro-active activities • Bringing local constituencies to participate in the development of IFRS • Participating in the IASB efforts to achieve consistency of application • Coordinating field tests and post implementation reviews • Contributing to endorsement processes EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

9. What is EFRAG? • The very first regional group created 10 years ago • Fully developed model of how to exercise influence • Built on strong partnership with European NSS • Its success has inspired the development of other regional groups EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

10. EFRAG serving European stakeholders • Draft comment letters on all IFRS related issues • Sendyourviewswheretheydiffer • Outreachactivities: public hearings • Field tests, effectstudies • Regular public EFRAG-IASB meetings, summaries on www.efrag.org • Discussion papers on up-streamprojects • Feedback statements EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

11. EFRAG SUPERVISORY BOARD EFRAG TECNICAL EXPERT GROUP EU NSS USER PANEL Insurance WG SME WG Fin Instruments WG Income tax AP Disclosure Fwk AP BCUCC AP Business Model AP (to be set up soon) EFRAG TECHNICAL STAFF EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

12. EFRAG’s objectives Ensure that European views on the development of financial reporting are properly and clearly articulated in the international standard-setting process • Proactive contribution to the IASB and IFRS Interpretations Committee • Co-ordinate proactive EU activities • Adviser to the EU Commission on accounting matters (Endorsement advice & other) EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

13. Focus on improvement, not on change EFRAG Proactive Strategy: ‘Focus on Improvement’ Strategic aims: • Influence development of IFRS • Engage with European constituents • Provide thought leadership • Promote solutions that improve the quality of information, that are practical, and enhance transparency and accountability EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

14. Proactive projects EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

15. Accounting in Europe fully integrated? EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

16. Yes! No! EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

17. SME accounting in Europe An issue of high controversy: • Technically • Case for an international standard is not made • Risk for a multiple tier accounting system • Many countries have link to taxable income • IFRS relevance to “annual accounts” is more broadly being discussed at present • Politically • Sovereignty remains at stake • National standard setting expertise is easier to maintain if national GAAP are maintained EFRAG – Accountants Association in Poland - Warsaw 29 November 2011

18. Thank you for your attention! EFRAG 35 Square de Meeûs 1000 Brussels Belgium www.efrag.org EFRAG receives financial support of the European Union-DG Internal Market and Services. The contents of this presentation is the sole responsibility of EFRAG and can under no circumstances be regarded as reflecting the position of the European Union. EFRAG – Accountants Association in Poland - Warsaw 29 November 2011