Álit: tímarit löggiltra endurskoðenda - 01.01.1993, Page 21

category we find first of all the Treaty of Rome, the
agreement by which the whole Community was
created way back in 1957. To the same category of
fundamental documents also belongs the Single
European Act with its bold vision of a single
European market. In the future, the treaty of
Maastricht may be included in the group if the
member states can agree to ratify it. In the practical
everyday life, however, the most important legal
acts of the European Community are regulations
and directives. They are based on the Treaty of
Rome and the other fundamental agreements.
Directives are rules for the legislation in the
member states. Typically, individual states
implement them not by making the directives
themselves national law but by writing and
adjusting national law so that it will cover the
contents of the directives. By the EEA Agreement
some 1,500 acts of legislation of the European
Community will be applicable to the EFTA
countries, immediately or, as a rule, after a period
of transition of two years. This means that we shall
have to amend our national laws to conformity with
the E.C. directives by 1 July 1995 (or a slightly later
date, depending on the ratification procedure in
Spain and some other E.C. countries). All the
directives have the Treaty of Rome as their ultimate
background. From the point of view of our
profession that means in particular article 54.3.g.
That article states that, in order to make a reality of
the freedom of establishment of enterprises set out
in article 58, third parties as well as shareholders
have to be protected. The protection shall be made
possible by harmonising the obligations of
companies in the community. Obviously, among the
most important such obligations we find the
accounting and auditing requirements. The
accounting profession is affected mainly by three
groups of directives: There are directives on
accounting: the 4th, 7th and llth directives on
company law. There is a directive on the audit
profession: the 8th directive on company law. The
draft 5th directive also contains elements that
concem auditors, but the future of that directive is
unclear. Finally, there is a directive on mutual
recognition of diplomas which govems the right of
individuals to practice a regulated profession in
another state than that where he or she obtained the
original licence to practice. This directive has
nothing to do with the article on accounting and
auditing in the Treaty of Rome; it is based on article
3.c about the free movement of individuals, services
and capital, as specified in articles 49, 57.1, and 66.
For those in the accounting profession who
specialise in particular areas it goes without saying
that there are numerous other directives to be taken
into consideration. Taxes as well as banking,
insurance and the stock exchange are but a few
examples of areas covered by directives.
A new accounting environment.
The 4th directive on company law specifies the
minimum requirements as to the contents, format
and publication of the financial statements of a
company. The 7th directive gives similar
requirements with respect to the consolidated
statements of groups of companies. Given the
comparatively high standard of financial accounting
in the Nordic countries as well as our tradition of
openness and transparency in financial statements,
the accounting directives are not likely to impose
major difficulties on the Nordic business
community or on the accounting profession in the
Nordic countries. In some countries far south of
Reykjavík circumstances are different - or at least
they were, at the time of the creation of the 4th
directive. Technical standards were inferior and the
prevailing attitude of the business community was
to conceal as much information as could be
concealed. That caused embarrassment and delayed
the implementation of the directives till long after
the mandatory deadline. I can see no reason why
Iceland, or my own country, or indeed any Nordic
country, would meet similar more or less political
problems. This is not to say that the implementation
will be entirely painless. The time provided is short.
Some changes, although of technical nature, will
involve virtually all companies. One example is the
compulsory formats for balance sheets and income
statements. Some other changes may be of more
philosophical nature. At least in my own country,
with its strong German heritage in the accounting
field, the concept of “a true and fair view” is
currently being carefully studied. It is new to
Swedish accounting legislation. The problem is that
we do not yet know how new it is. The Anglo-
Saxon influence after World War II may have had
as its consequence that the present generation of
accountants subconsciously think in terms of “true
and fair” although they issue their opinions with the
old “in conformity with the law” wording. I am sure
that the Icelandic profession will have to deal with
similar philosophical problems. I understand
another lecturer this aftemoon, Arni Tómasson, will
deal with some more particular Icelandic
implementation problems.
Regulation of the accounting profession.
The 4th and 7th directives state that financial
statements of companies shall be audited by
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