High hopes resting on IAS
The introduction of International Accounting Standards (IAS) will bring multiple economic benefits, particularly for listed firms, spurring the establishment of a single European capital market and promoting competition, Economy and Finance Minister Nikos Christodoulakis said yesterday. «The obligatory application of IAS will contribute to the creation of a single European capital market, with greater depth and high liquidity, as well as strengthening the protection of investors,» he said in an address to the Athens Stock Exchange (ASE). Christodoulakis said the application of IAS in the financial statements of ASE-listed firms, which is expected from January 1, 2003, will help improve transparency in stock market operations and the general picture of the bourse as well as attracting foreign investment The larger eurozone market offers opportunities for firms applying IAS, facilitating the raising of funds, reducing the cost of capital and maximizing value, he added. The introduction of IAS is only one of upcoming initiatives aimed at boosting the transparency and competitiveness of Greek firms, and will soon be followed with a draft bill introducing the principles of corporate governance and new measures for more effective auditing, Christodoulakis announced. He said the government was proposing a framework of discussion for a more effective auditing of firms and generally upgrading the auditing profession, focusing on three points: First, the replacement of chartered auditors every three years and of the auditing company after a maximum period. Second, making it incompatible for a firm to offer both consultative and auditing services simultaneously, or within a certain timeframe; this provision may require a transitional period for companies that have signed long-term contracts. Third, incentives for the further training of auditors or obligatory courses. Attention will also focus on certain changes to the requirements for entrance into the auditing profession and its effective deregulation Speaking at the same event, Capital Market Commission (CMC) Chairman Stavros Thomadakis noted that the application of IAS, which would boost investor protection and their stock preferences, will require extensive mobilization and the training of staff and auditors. «CMC has already worked at many levels for the adoption of the (new) standards. In 2000, we introduced mandatory cash-flow tables by listed firms according to IAS specifications,» he said, noting that 27 ASE-listed firms, representing 53 percent of its total capitalization, had already issued their financial statements according to IAS requirements. ASE Chairman Panayiotis Alexakis concurred that the introduction of IAS would create favorable prospects for listed firms and the Greek capital market. «The period of preparation has already begun and we shall successfully meet the challenge,» he said.
