5.9 Listing and the Information Management Regime 191reports). Share issuers who already publish quarterly financial reports are not re-
quired to publish interim management statements.^243
The annual and semi-annual reports are in effect mini-prospectuses. They must
contain the audited (annual) or condensed (half-yearly) financial statements of the
company, a management report and statements. These statements are made by the
“persons responsible within the issuer” to the effect that, to the best of their
knowledge, the financial statements prepared in accordance with the applicable set
of accounting standards give a true and fair view.
The Transparency Directive also lays down a minimum standard of liability for
the breach of these rules. Someone – at least the issuer or its administrative, man-
agement or supervisory bodies – must be responsible for the information to be
drawn up and to be made public in accordance with the provisions of the Direc-
tive. Someone – either the issuer, its administrative, management or supervisory
bodies or “persons responsible within the issuer” – must also be liable for failure
to do so. Member States are free to determine the extent of this liability.
The Transparency Directive does not apply to companies whose shares have
been admitted to trading on a market that is not regarded as a regulated market
under Community law.
Accounting standards. Accounting standards have been dealt with in the Fourth
and Seventh Company Law Directives and the International Accounting Standards
(IAS) Regulation. They should partly improve the quality, comparability, and
transparency of the financial information provided by companies, and partly en-
sure compatibility with international standards. The applicable accounting stan-
dards depend on the company.
If the company is governed by the law of a Member State and its securities are
admitted to trading on a regulated market of any Member State, the company must
use IFRS.^244 The IAS Regulation allows Member States to extend this requirement
to all companies. In the US, listed companies are required to use the US GAAP.
The SEC has recognised IFRS as adapted for the UK (UK IFRS). This can, in
practice, cause multinational companies incorporated in the other Member States
to keep two sets of books: one in US GAAP or the UK IFRS, and the other in the
country’s own IFRS. Different countries enforce and interpret the standards in dif-
ferent ways, which can reduce the comparability of financial statements.
If the company is governed by the law of a Member State and its securities are
traded on a market that is not regarded as a regulated market under Community
law, Community law does not require the use of IFRS. On the other hand, such a
requirement could in principle be based on national law or the rules of the unregu-
lated market.
Statutory audits. All statutory audits required by Community law should be car-
ried out on the basis of international auditing standards.^245 The Accounting Direc-
tives require statutory audits unless the company is small.
(^243) Article 6 of Directive 2004/109/EC (Transparency Directive).
(^244) Article 4 of Regulation 1606/2002 (IAS Regulation).
(^245) See recital 13 and Article 26(1) of Directive 2006/43/EC (Directive on statutory audits).