21.7.2006 Official Journal of the European Union L 199/33 COMMISSION DECISION of 14 July 2006 setting up a Standards Advice Review Group to advise the Commission on the objectivity and neutrality of the European Financial Reporting Advisory Group’s (EFRAG’s) opinions (2006/505/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Whereas: (1) The high level of transparency and comparability of financial reporting for all publicly traded Community companies is necessary for building an integrated capital market which operates effectively, smoothly and efficiently. (20 In order to contribute to a better functioning of the internal market Regulation (EC) No 1606/2002 of the European Parliament and of the Council (') provides that the companies listed on regulated market are required to prepare their consolidated accounts in accordance with a single set of global accounting standards, commonly refereed to as International Financial Reporting Standards (IFRS). The Regulation, in its recital 10, foresees the creation of an accounting technical committee to provide support and expertise to the Commission in the assessment of international accounting standards. (3)  The European Financial Reporting Advisory Group (EFRAG) was founded in March 2001 by the organi- sations representing preparers, users and accountancy professions involved in the financial reporting process; EFRAG provides opinions on whether the standard or interpretation to be endorsed complies with the Community law and, in particular, the requirements of Regulation (EC) No 1606/2002 as regards understan- dability, relevance, reliability and comparability as well as the true and fair principle as set out in Council Directives 78/660/EEC () and 83/349/EEC (3). () O] L 243, 11.9.2002, p. 1. () OJ L 222, 14.8.1978, p. 11. Directive as last amended by Directive 2006/43[EC of the European Parliament and of the Council (O] L 157, 9.6.2006, p. 87). () OJ L 193, 18.7.1983, p. 1. Directive as last amended by Directive 2006/43EC. (4)  As EFRAG is a private body it is important for the high quality, transparency and credibility of the endorsement process to establish appropriate institutional infra- structure ensuring that its endorsement advice is objective and well-balanced. (5 In this context, the Commission considers that a Standards Advice Review Group composed of inde- pendent experts and high level representatives from National Standard Setters should therefore be established to serve as a body to reflect on the endorsement advice submitted by the EFRAG with a view to assessing whether its content is well-balanced and objective, HAS ADOPTED THIS DECISION: Article 1 A group of non-governmental experts in accounting, hereinafter referred to as ‘the group’, is hereby established. Article 2 Task The role of the group shall be to advise the Commission, before it takes a decision on endorsement, on whether EFRAG’s opinions on endorsement of International Financial Reporting Standards (IFRS) and Interpretations by the International Financial Reporting Committee (IFRICs) are well-balanced and objective. Atticle 3 Membership — Appointment 1. The group shall comprise of maximum seven members. 2. The Commission shall appoint the members of the group from independent experts whose experience and competence in the accounting area, in particular in financial reporting issues, are widely recognised at Community level. The members shall be selected on the basis of eligible proposals submitted following the call for applications published on the website of DG Internal Market and Services.