The European Financial Reporting Advisory Group[1] is a private association established in 2001[2] with the encouragement of the European Commission[3][4] to serve the public interest[5] in both financial and sustainability reporting.[6] Its Member Organisations are European stakeholders and National Organisations having knowledge and interest in the development of International Financial Reporting Standards and how they contribute to the efficiency of capital markets.[7][6] In 2022, the group extended its mission to providing technical advice to the European Commission in the form of fully prepared drafts of EU Sustainability Reporting Standards (CSRD).[6][8] The EFRAG membership structure includes three chapters: the European Stakeholder Organisations Chapter[9], the National Organisations Chapter[10] and the Civil Society Organisations Chapter[11]. EFRAG Member Organisations can join one of the pillars or both. EFRAG has as of 31 December 31 Member Organisations.[12]
EFRAG is a body independent of the Commission and of the International Accounting Standards Board (IASB) that is appointed as the technical advisor of the Commission in the context of the development and adoption of international accounting standards in the Union.[13][14] EFRAG hears all views and of all specific circumstances originating in Europe and synthesises these to speak convincingly, clearly and consistently, as the European Voice in Financial Reporting, building its legitimacy on its governance, due process and public accountability.[15] EFRAG carries its assessments of IFRS throughout the standard setting process. It ultimately provides advice to the European Commission as to whether IFRS meets the IAS Regulation endorsement criteria for use in the preparation of accounts in the EU. This assessment includes whether endorsing the newly issued or revised IFRS would be conducive to the European public good.
EFRAG's mission is carried out "with the encouragement of the European Commission to serve the public interest".[16]
Public accountability
Public accountability is ensured on the one hand by EFRAG's governance and on the other by EFRAG's due process. EFRAG is accountable to the public at large and the European institutions through its open and transparent due process; including public consultation on its positions; transparency of EFRAG's work; public meetings of the EFRAG Technical Expert Group and of the EFRAG Board, EFRAG Board public agenda papers and open nomination processes.[citation needed] EFRAG publishes every year an Annual Review discussing its activities and presenting financials of the past year. The funding by the European Commission brings enhanced scrutiny of EFRAG's activities and expenses, including the publication of audited annual accounts and detailed activity reports to the European Commission.
Structure (Governance & Pillars)
EFRAG's leadership ensures accountability and strategic direction across the European Union. The General Assembly, EFRAG's supreme governing body, composed of all its members made up of representatives of its constituents, is responsible for setting up the Supervisory Board, with the assistance of the Governance and Nominating Committee made up of representatives of EFRAG Member Organisations and National Funding Mechanisms.[17] The Supervisory Board is responsible for monitoring governance: it selects the members of the TEG and PRC, regulates the cooperation between EFRAG and the National Standard Setters and works to maintain EFRAG's funding.[17] It oversees compliance with the strict Due Process rules that govern EFRAG’s technical work and formally appoints the members of the Technical Expert Groups (TEGs). The Technical Expert Group (TEG), made up of independent experts, is responsible for issuing opinions on IFRS exposure drafts and endorsement letters to the Commission in full autonomy, without submitting their opinions for approval by the Supervisory Board.[17] The Planning and Resources Committee (PRC), which mainly brings together the National Standard Setters, is in charge with proactive actions, contributing upstream to the reflection work of the IASB.[17] The Consultative Forum of the national Standards Setters (CFSS) is also an organisation of the national standards bodies; four of which also participate in the meetings of the TEG in an advisory capacity.[17]
Organization Chart for the European Financial Reporting Advisory Group (EFRAG), detailing the governance structure and the two pillars for Financial and Sustainability Reporting.
The Two Pillars of EFRAG (Technical Standard-Setting)
EFRAG's technical work is organized into two separate, specialized pillars, a structure put in place following its expanded mandate in 2022 to cover sustainability reporting. Each pillar consists of a Reporting Board (for policy) and a Technical Expert Group (TEG) (for drafting).
A. Financial Reporting Pillar (IFRS Endorsement)
This pillar focuses on the adoption of International Financial Reporting Standards (IFRS) issued by the IASB.[18] Its primary output is the Endorsement Advice sent to the European Commission. The Financial Reporting Board (FRB) is responsible for Policy Decisions & Endorsement, approving the final Endorsement Advice sent to the European Commission that recommends whether IFRS standards should be adopted for use in the EU. The Financial Reporting Technical Expert Group (FR TEG) undertakes Technical Preparation, providing detailed, technical support to the FRB by rigorously analyzing the accounting impacts of IFRS and drafting the content of the endorsement advice.
B. Sustainability Reporting Pillar
The Sustainability Reporting Board (SRB) handles Standard Approval, formalizing the final drafts of the ESRS which are then submitted as formal technical advice to the European Commission for legal adoption. The Sustainability Reporting Technical Expert Group (SR TEG) is dedicated to Standard Drafting, developing the detailed drafts of the ESRS, conducting extensive field tests, and managing the public consultation process to ensure standards are technically robust and feasible.
Cross-Pillar Coordination and Legitimacy
EFRAG’s overall effectiveness and legitimacy rely on strict operational principles applied across both pillars. All key bodies are composed to achieve a balance between different stakeholders (preparers, users, auditors) and different geographic origins within the EU. A mandatory, transparent process—including extensive public consultation and formal hearings—must be followed before any recommendation or standard is finalized. This ensures democratic legitimacy. The two pillars coordinate closely (via the Administrative Board and Secretariat) to ensure that the newly developed ESRS are coherent with existing IFRS and align with global sustainability reporting initiatives (like the ISSB).
Endorsement process
The European Commission is required to formally initiate the process by sending EFRAG a letter requesting the endorsement advice.[4] This letter systematically demands a technical assessment of the relevant IFRS, ensuring it meets all the criteria established in Article 3 of the IAS Regulation (which primarily concerns the "true and fair view" principle, public good, and acceptance).[4] Furthermore, EFRAG must supply an extensive impact analysis. This analysis is crucial and must include a cost-benefit assessment and cover broader macroeconomic impacts, with the level of detail proportional to the importance of the specific IFRS under review.[4] The European Commission maintains flexibility and may request EFRAG to assess the IFRS regarding its effect on individual annual financial statements, a request often made by Members of the Accounting Regulatory Committee (ARC) or other interested parties.[4] EFRAG is also obligated to proactively inform the Commission if it identifies any critical reasons for assessment that were not explicitly raised.[4] Finally, if the initial advice lacks sufficient evidence or explanation, the European Commission can ask EFRAG to supplement the initial endorsement advice with specific, additional elements.[4]
Endorsement mechanism
IFRS issued by the IASB are endorsed by the Commission under a comitology process.[17] An endorsement process remains necessary to ensure that the standards developed by a private body meet certain criteria and are fit for the European economy before becoming part of EU law.[17] The endorsement process for IFRS is generally considered smooth and efficient by stakeholders, though timing concerns introduce regulatory uncertainty which must be balanced against the need for a proper due process allowing adequate contribution time.[17] The key factor for the IFRS endorsement process is fully understanding a standard's effects, with the IASB providing limited analysis (focused on users) which is supplemented by the Commission services and EFRAG assessing the effects at the EU level.[17]
↑The European Economic and Social Committee (ESC) strongly supported the proposed Regulation, viewing the establishment of a common accounting basis across the EU for all listed companies as an important element in completing the Single Market in financial services.
123"About us". European Financial Reporting Advisory Group (EFRAG). EFRAG. Retrieved 6 December 2025. EFRAG's mission is to develop and promote European views in a thought leadership role and to ensure that they are properly taken into account in the ISSB standard setting process.
↑Strategic business and financial considerations rather than technical accounting issues are the most compelling reasons driving this change. These include marketability, cross border mergers and acquisitions, shareholder dialogue and finance raising.
↑As a private sector body its recommendations will not be binding on the Commission which will provide a full report detailing the EFRAG recommendation and its own evaluation to the Accounting Regulatory Committee for decision.
↑This chapter includes major European federations representing various stakeholders across both Financial and Sustainability Reporting pillars: Accountancy Europe, BusinessEurope (European Business Federation), EACB (European Association of Co-operative Banks), EBF (European Banking Federation), ESBG (European Savings and Retail Banking Group), EFAA (European Federation of Accountants and Auditors for SMEs), EFFAS (European Federation of Financial Analysts Societies), Insurance Europe (European Insurance Federation), EuropeanIssuers (joined for Sustainability Reporting), EFAMA (European Fund and Asset Management Association), EUROSIF (European Sustainable Investment Forum)
↑These are national standard-setting bodies or groups from EU Member States: Austria (Austrian Group of Standard Setters), Belgium (Commission des Normes Comptables/Commissie voor boekhoudkundige normen - CNC/CBN), Denmark (Grouping of five Danish organisations), France (Autorité des Normes comptables - ANC), Germany (Accounting Standards Committee of Germany - ASCG), Italy (Organismo Italiano di Contabilità - OIC), Luxembourg (Commission des Normes comptables - CNC), The Netherlands (Dutch Accounting Standards Board - DASB), Spain (Instituto de Contabilidad y Auditoria de Cuentas - ICAC), Sweden (The Association for Generally Accepted Principles in the Securities Market)
↑EFRAG ultimately provides advice to the European Commission on whether newly issued or amended IFRS Accounting Standards meet the criteria of the IAS Regulation for endorsement for use in the EU, including whether endorsement would be conducive to the European public good.
↑The ESC strongly supports the Commission’s intention that each IAS will either be adopted or rejected in total. To introduce partial approval or modified versions of IAS would be extremely confusing and would undermine the fundamental decision to use IAS.
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