Two years ago, the word accountancy was rarely heard in Brussels.

These days, there is hardly a speech by a senior European Union official not littered with the jargon of the accounting fraternity. Accountancy and auditing are now at the centre of the European Union.

The European Commission is bracing itself for the publication of the European Court of Auditors report on the 1999 budget, which is likely to confirm the persistently high level of mismanagement of EU funds. Some estimates put this at around £1 billion annually.

The commission remains under considerable pressure to demonstrate real change and Neil Kinnock, who is responsible for the reforms, appears particularly anxious to put an efficient new structure in place.

An external expert is to be appointed to the Audit Progress Committee.

The Court of Auditor's report on the 1999 budget will cover the last months of the Santer Commission.

There are likely to be many serious criticisms but there is a strong feeling that the European Union cannot afford a second implosion.

This sentiment is particularly evident in the European Parliament which triggered Santer's downfall. There is considerable support for the Court of Auditors to focus as much on EU member states as on the commission.

After all, the member states are responsible for about 80 per cent of the EU budget and some MEPs would like to see the court "name and shame" those who are not doing enough to stamp out fraud.

The success of the European Union institutions' attempts to deal with financial management problems depends on their ability to draw on specialist accounting and auditing skills.

The number of qualified accountants working in the European institutions has been very low. The accountancy media has reported problems relating to the recognition of UK accountancy qualifications by the institutions.

Fortunately, the European Commission has confirmed that the Consultative Committee of Accounting Bodies qualifications are sufficient to permit entry to the senior level recruitment competitions.

At least in this respect, the EU institutions are moving in the right direction.

By Martin Manuzi, senior executive, Institute of Chartered Accountants Brussels office