For the global accountancy body, the EU executive is rightly targeting and associating long-term thinking with an integrated approach to address the pressing challenges linked to the financing of long-term investment needs, both for the private and the public sector.
ACCA supports the European Commission's decision to look in a holistic way at how the financial services sector channels investments, at the efficiency and effectiveness of financial markets, at the role of public policies in catalysing long-term saving and financing, and, last but not least, at facilitating SMEs' access to finance.
John Davies, head of technical at ACCA says: 'Many of the areas targeted by the Green Paper are close to ACCA's heart, such as corporate governance, accounting and corporate reporting, taxation, the role of the public sector, and especially access to finance for SMEs. We believe that new banking regulations, CRDIV in particular, could potentially risk making it more difficult for banks to finance the recovery in Europe and so we welcome the Commission's thinking on alternatives. In any case, it is important to acknowledge that Europe is more reliant on its banking sector for growth than the US or other major economies, and a shift to equity financing in particular is long overdue.'
John Davies stresses: 'We welcome moves to promote and facilitate the adoption of a more long-termist approach by businesses, large and small. Many of the problems we currently face are the consequence of businesses paying too much attention to short-term targets and performance measures and not enough to ensuring the sustainable and long term development of the business.'
'We recognise the importance of financial reporting for investors and so it is legitimate for its part to be considered. Reporting has to focus on giving relevant information to investors, whether they turn out to be long or short-term. Fair value has an important place in providing up-to-date information as long as its limitations are understood, though it will not always be the relevant measure especially for assets that are to be employed in the business rather than be sold' John Davies continues.
John Davies adds: 'From a public sector perspective, ACCA has always been an advocate of greater transparency of financial reporting, together with clarity on long-term policy and decision-making that goes beyond the short-term political cycle. In addition, sustainability must remain an important concern in shaping decisions on the size of any member state's overall investment programme and the role of investment institutions have an important role to play in this context.'
'We also believe that state aid and public procurement can help support local economies and dealing with the financial difficulties presented in a post-financial crisis world. Similarly, there is a need for a sound public private partnerships - PPPs - framework, but there is a caveat: PPPs should only be used where they can show a clear benefit for taxpayers and citizens' John Davies explains.
'Access to long-term finance is only one aspect of the wider picture on this issue but it is nonetheless important to incentivise businesses in financial terms. ACCA welcomes the opportunity to contribute to this wide-ranging public consultation and looks forward to the upcoming debates' John Davies concludes.
For more information, please contact:
Cecile Bonino, ACCA Brussels
+32 (0) 2 286 1 37
Notes to Editors
- ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
- We support our 154,000 members and 432,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,400 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
- Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.