The European Parliament has voted through a long-awaited series of changes to the EU's accounting framework abolishing quarterly reporting, introducing country-by-country reporting for extractive and logging companies and reducing reporting requirements on small and micro businesses.

Work to replace the fourth and seventh EU accounting directives started in 2007 and is now largely complete.

Michel Barnier, European Commissioner responsible for markets and services said: 'Financial reporting obligations have been modernised and costs reduced, in particular for SMEs. With the new rules on country by country reporting, we have created a framework where businesses and governments must disclose revenues from natural resources. This framework will also contribute to the fight against tax fraud and corruption.'

Dr Nigel Sleigh-Johnson, head of ICAEW's financial reporting faculty, said: 'ICAEW has been calling for a root-and-branch modernisation of the accounting directives for many years. After numerous consultations and debates, we can now finally see the finishing line. However, there are substantial issues to be addressed as the legislation is enacted in the UK. For example, a review of the disclosure requirements of the Financial Reporting Standard for Smaller Entities (FRSSE) will be necessary.'

Sleigh-Johnson said other changes would also have a wide reach, such as the end of mandatory quarterly reporting for listed companies and restrictions on the disclosures that member states can mandate for small companies.

The new accounting directive incorporates the decision to give each member state the ability to introduce significantly simplified reporting requirements for micro businesses, as adopted into EU legislation last year.

Sleigh-Johnson said: 'We have grave doubts about the value of some of these optional exemptions. We have been in discussion with the Department for Business, Innovation and Skills (BIS) to try to ensure that the new regime does not undermine the usefulness of financial information produced by companies, particularly where they are seeking access to new sources of finance.'

Barnier said that the revision of the accounting directives paved the way for the introduction of new measures on tax transparency.

'I think it should be possible to introduce rules for the publication of the information on a country by country basis, similar to those approved for banks, or in the Commission's proposal on improving the transparency of certain large companies on non-financial reporting, adopted in April,' Barnier said.