Children should be taught how to run a business
ACCA (the Association of Chartered Certified Accountants) is calling for the EU to include business studies on the curriculum for every school child. It feels that the EU's poor rate of SME success would benefit if the next generation of business owners were taught entrepreneurship and business studies at an early age.
The demand for action was made at the launch of its European Manifesto, Accounting for Europe’s Development. The Manifesto is published as the EU faces increasing global competition, especially from China and other rapidly developing economies.
Detailing significant financial and economic issues for the EU, the Manifesto offers a series of recommendations to bring about wholesale change and improvements:
· Prompt agreement on a new seven year EU budget. Without consensus, the EU seriously risks being left without the necessary finance to invest in innovation, research and education.
· A clearer understanding by accession state governments, businesses and individuals of the new legislative requirements of EU membership. There are concerns that accession state countries lack the infrastructure and experts to take advantages of the benefits the EU could offer. Investment in education and training is critical if the new Member States are to be active participants in EU decision making.
· An equal application of Financial Services Action Plan (FSAP) in the EU. The CESR’s (Committee of European Securities Register) role must go beyond the basic monitoring of infringements to also facilitate consistent application of the FSAP.
· A renewed emphasis of the FSAP on both consumers and small businesses, and not just on wholesale markets. EU consumers still remain unable to seize opportunities for cheaper pensions, insurance and mortgages across the EU – a massive 95 per cent of transactions in EU consumer markets are still confined to national boundaries. And for SMEs in the EU, the FSAP needs to be more relevant, with enhanced services for banking, insurance and investment opportunities.
· A single set of principles-based regulations, managed by each country’s national financial regulators. This will remove the current administrative burden for companies to have to create separate entities in each country to sell their financial products.
· EU governments to pro-actively reform their tax systems so they are non-discriminatory and compliant with EU law – this approach which will help to eliminate uncertainty and improve the EU’s business environment. The introduction of the EC Home State Taxation proposals would be one such welcome reform. Although currently at pilot stage, Home State Taxation would enable small businesses to take much greater advantage of the European Single Market.
· Improvement of the EU’s poor SME success rates by creating an entrepreneurial culture at an early stage at school – a simple first step is to include entrepreneurship and business studies in all school curricula.
· Improvement of the regulatory environment for EU SMEs through more use of the Regulatory Impact Assessment (RIA) mechanism, which assesses the impact of new policy initiatives on businesses and includes cost benefit analysis. Removing duplicate, redundant or overly complex legislation is also vital, and the EU must actively communicate the purpose and benefits of the RIA – this will give the process more meaning for businesses.
· Reduction of the current audit exemption threshold – at 8.8 million Euro, the current audit exemption threshold for companies is set too high. It should be lowered so that more companies can be put through the audit process. This will benefit stakeholders and potential investors who are currently being deprived of valuable, independent and verifiable information about the financial health of that organisation.
· Truly consistent financial disclosure and corporate governance across the EU – not just amongst the 25 Member States, but with the USA too. Listed corporations, financial service companies and public interest entities should be encouraged to adopt a “comply or explain” approach to corporate governance, to avoid an overly-prescriptive, rules-based culture.
Posted February 13, 2006
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