Given the nature of these irregularities, I wrote to the Court of Auditors recently to clarify the legality of payments from public funds which are being qualified under international financial accounting standards.

As a member of the Committee on State Accounting Standards in 2002 and 2003, I played an active role in defining these standards, which entered into force in January 2004 and thoroughly overhauled French public accounting.

Since having the same tax rules in each state but without consolidation would provide companies with fewer benefits (issues such as transfer pricing would remain), development of a common tax base should therefore be followed by development of an accounting consolidation method, as the ones provided for in the International Accounting Standards (IAS) are agreed not to be suitable for tax purposes (many of consolidated accounts include the results of non-EU subsidiaries, financial accounting is never going to fully meet the requirements of the tax base, despite recent standardisation of national accounting standards) although compulsory u ...[+++]se of International Financial Reporting Standards (IFRS) for consolidated accounts from 2005 onwards (former IAS), could represent a neutral starting point for considering a common tax base.

34. Notes the crucial importance of reforming and streamlining accounting and auditing standards; emphasises the need for ethical and responsible behaviour not only of auditors but also of investment banks, law firms and others involved in advising companies on financial management and accounting practices; looks forward to the Action Plan for Corporate Governance (COM(2003)0284) being developed further; welcomes the convergence of national codes of corporate governance based on the "comply or explain" principle; welcomes the establishment of the European Corporate Governance Forum;

36. Notes the crucial importance of reforming and streamlining accounting and auditing standards; emphasises the need for ethical and responsible behaviour not only of auditors but also of investment banks, law firms and others involved in advising companies on financial management and accounting practices; looks forward to the Action Plan for Corporate Governance being developed further; welcomes the convergence of national codes of corporate governance based on the "comply or explain" principle; welcomes the establishment of the European Corporate Governance Forum;

With respect to the international harmonization of accounting standards, we are very much in favour of the international harmonization of accounting standards and have been actively working with the international accounting standards committee to help it get itself into a position where its standards are acceptable on a global basis.