The International Organization of Securities Commissions is planning to create a set of standards on the inspection and enforcement powers that regulators should have when investigating accounting problems at listed companies. The regulator has had several projects over the last few years aimed at harmonizing accounting standards in member countries. But following the recent collapse of Parmalat and other accounting scandals it has realized that it also needs to try and harmonize the enforcement powers that regulators in member countries have, said Philippe Richard, secretary general.

IOSCO will start surveying member regulators to get details of their inspection and enforcement powers in the next month or so and will use this information to create a standard set of enforcement powers that all regulators should have, said Richard. The standards should be published sometime next year and should eventually lead to tougher enforcement powers in some countries, he noted. Richard said that some regulators, such as the Securities and Exchange Commission, already have strong powers to fine listed companies that make misleading or false financial statements, but other regulators do not have these powers. He declined to comment on which regulators might not have enough power. But the Swiss Federal Banking Commission, for example, does not have the power to impose fines.

(Compliance Reporter)