The European Commission (EC) is conducting a critical review of whether International Financial Reporting Standards have delivered the expected benefits of comparability and transparency of financial reports since the implementation of the 2002 IAS Regulation within the European Union.
The analysis of IFRS - set by the International Accounting Standards Board (IASB) and promoted by the board for enhancing comparability of financial reporting across different jurisdictions - will include a cost-benefit analysis of using the rules.
The review - which is to be conducted by mid-tier firm Mazars and the ICAEW - follows wide criticism of the IFRS conceptual framework during a consultation which closed on January 14.
UK firms and professional bodies have indicated particular concerns over whether the new proposals give sufficient weight to the concepts of stewardship, prudence and reliability.
There has also been widespread disagreement over IASB's latest exposure draft on leasing, while the new revenue recognition standard is viewed as likely to result in changes in practice for some companies.
Jonathan Russell, partner at ReesRussell and representative of UK200Group said the whole framework of accounting and reporting is in disarray and needs a ground-up review.
'We seem to have lost the whole purpose behind what accounts and reports are supposed to deliver. It is a bit like technological advances - just because we can do something doesn't necessarily make it right or valuable,' said Russell.
The ICAEW and Mazars will look at whether IFRS has helped to make the market transparent and efficient in comparison to the situation before, and will also identify areas for improvement, if needed.
Robert Hodgkinson, ICAEW executive director, said: 'The task of Mazars and ICAEW is to take stock after eight years of IFRS reporting in the EU and assess the impact of the switch to IFRS on the comparability and transparency of the financial reports of European companies.'
The study will run until autumn 2014. It will provide a general analysis of the impacts of IFRS for preparers and users of financial statements from the private sector. It is also to include an assessment of the drawbacks brought by the IAS Regulation for different stakeholder groups.
A previous ICAEW study which examined the 2005 implementation of international accounting standards across the EU, published in 2007, concluded that the transition to IFRS had been challenging, but successful.
In response to the announcement of the ICAEW/Mazars project, a spokesman for IASB said: 'We note the appointments, but have no further comment to make at this time'.
