The decision to award the contract to ICAEW and Mazars, which was announced last month, was criticised by the Liberal Democrat MEP Sharon Bowles, who is chair of the European Parliament’s ECON committee in a letter to EU commissioner Michel Barnier earlier this month, citing potential conflicts of interest.

Bowles cited concerns including the fact Francoise Flores, a former partner at Mazars in France, is chairwoman of the European Financial Reporting Advisory Group (EFRAG), which is responsible for ensuring IFRS are endorsed in the EU. She also pointed out that the ICAEW's main IFRS taskforce is made up of representatives of the Big Four and members of the IASB, the body responsible for setting global accounting standards.

Barnier has now said the contract has been terminated.

A Commission spokesperson told Accountancy: ‘Commissioner Barnier has taken note of the serious concerns expressed by members of the European Parliament, one of the EU's co-legislators and one branch of its budgetary authority, about the choice of a contractor in the framework of the Commission's planned evaluation of the IAS Regulation and on the governance of the IFRS Foundation.

‘He attaches great importance to the quality of this evaluation of the 10 years of application of the IAS regulation which the Commission services have decided to carry out. This is the first comprehensive review of the EU accounting framework for listed companies. No doubt can be cast on the conditions under which it will be performed. Noting the concerns expressed, he considered that it was appropriate to review the methods to be used when performing that important evaluation.

‘As regards the IFRS Foundation, the Commission services are in contact with that organisation and will examine the elements that will be provided to respond to the criticism expressed by MEPs.’

In a joint statement in response to the decision, IAEW and Mazars said: ‘Mazars and ICAEW successfully bid for this project during an open, transparent and competitive tendering exercise. We strongly reject any suggestion that our involvement may have compromised the independence of this study.’ 

 The statement went on to say: ‘Each of us has a long and successful track record of delivering on these kinds of public interest projects with integrity and impartiality. We have been given written assurance by the Commission that the decision to terminate does not in any way put into question our competency and independence in this matter.’

The study was scheduled to run until autumn 2014 and provide a general analysis of the impacts of IFRS for preparers and users of financial statements from the private sector. It was also to include an assessment of the drawbacks brought by the IAS Regulation for different stakeholder groups.