Regulation 

Regulation concerning financial statements of listed companies is undertaken by a UK-based body under civil law, the International Accounting Standards Board (IASB), and a committee operating under it, the International Financial Reporting Interpretations Committee (IFRIC). IASB regulation is incorporated into EU legislation via a separate committee procedure. The IFRSs, adopted by European Commission regulation, are binding on listed companies.

Key actors in the approval of the IFRS at European level are the European Financial Reporting Advisory Group (EFRAG) and the Accounting Regulatory Committee (ARC).

EFRAG assists the Commission in deciding whether a standard issued by the IASB or an interpretation given by the IFRIC can be approved as EU legislation. Subsequently, the ARC, consisting of representatives of Member States' ministries, proposes approval or rejection of the standard or interpretation to the Commission. Assisting the Committee is a special group that examines the impartiality and equitableness of opinions issued by the EFRAG, the Standards Advice Review Group (SARG). The EU's codecision procedure (including the Lamfalussy regulatory framework) has been changed by adding a new procedure, in which the Commission is assisted by the Regulatory Procedure with Scrutiny Committee (RPSC).

The CESR has observer status in both EFRAG and the ARC, whereas the Committee of European Banking Supervisors (CEBS) only participates in the latter as an observer. Both supervisory committees (CESR and CEBS) seek to influence regulation and interpretation concerning financial reporting, particularly when IASB or IFRIC submits a proposal for a new standard or interpretation or proposes amendments to those issued earlier.

2 February 2010