IFRS and the works council in France

Abstract

This paper is about Financial Reporting for employees and their representatives. They have specific needs that do not meet those of shareholders. The need for employees to be given comprehensive information on the company’s situation is not taken into account by the prevalent reporting standards, i.e. IFRS. In the first part of this paper, we show how IFRS are detrimental to the specific reporting’s needs of employees and works councils. In the second part, we present Jacques Richard’s contribution to company’s financial analysis, to the benefit of all stakeholders. Now that the IFRS have invaded the field of accounting and financial reporting, we should fall back on ad hoc forms of reporting, to meet the needs of employees and their representatives. We explore some of these ad hoc forms, only to conclude that they have limited scope and few support from the regulatory bodies. This conclusion is not satisfactory per se. It comes down to the fact that the IFRS have prevailed, even though they clearly do not meet the needs of users. Moreover, there is no certainty that shareholders will take advantage from the instability created by these standards. The fact that since the last financial crisis, the value of many listed companies is now lower than that of their book value, even when inflated by "made in IFRS" pyrotechnics and updates, indicates a level of pretension that cannot withstand economic cycles.