International accounting standards can help to improve transparency

International Financial Reporting Standards, introduced to listed companies this year, should apply to all firms, a special event on the fringes of the Money Show in Athens heard last weekend. «Transparency improves companies,» stressed Athens University of Economics and Business professor Constantinos Karamanis, proposing the extension of IFRS to non-listed firms as well. He also called for accounting in Greece to correspond to substance and not to appearances. Finally, Karamanis noted the need for adjustment of the tax legislation so that companies are not burdened with keeping accounting books based on both international and domestic accounting standards. Vassilis Kazas, CEO of Grant Thornton in Greece, echoed the demand to extend the use of IFRS, referring to the experience from their application. Some companies, he said, do not see the international standards as an opportunity or a challenge but as a necessary evil or even a threat. He suggested that 10 percent of listed companies published data which bore no relation to reality, stressing that IFRS should apply to all firms as happens in other European countries. We need principles that secure transparency rather than new regulations, said Kazas. The reform of corporate law and the change in the regulations concerning bankruptcy are in the final phase of processing, Deputy Development Minister Yiannis Papathanassiou told the same event. He said the government will enforce transparency in the operation of companies and in the portrayal of their accounting data, as well as the simplification of procedures regarding the foundation and operation of enterprises. Trade law professor at the University of Athens Evangelos Perakis noted that the Trade Register will start operating in early 2007. It will be electronic and add transparency to financial transactions, as entering the register can be a point of reference in some cases while data published in it will be comparable with other data. On the new corporate law, Perakis revealed that Harvard University has classified Greece with Third World countries regarding the protection of shareholder rights. With shareholder rights remaining minimal, it is accepted internationally that markets can achieve little success, so this partially explains the continued abstention of foreign investors from the Greek market. The CEO of listed electronics firm Germanos, Ioannis Karayiannis, called for the simplification of processes to set up and run a company, saying that Greek firms should not fear the advent of foreign ones in the local market. We should not waste energy for bureaucracy, he added, citing the example of his own company, which attracted many foreign shareholders once it began publishing the full and actual data of the company’s course. Karayiannis further highlighted the need for Greek embassies around the world to become more active on behalf of Greek companies doing business elsewhere.