In short, Soc Gen has placed the loss in the 2007 accounts instead of this year’s, using a little known ‘opt-out’ of the ‘true and fair’ provision in international accounting standards.

The provision allows for the opt-out in the event of strict adherence to the true and fair principle mangling the results such that they cannot be properly understood. The opt-out is very, very rarely used however, and many in the profession have cried foul over Soc Gen’s reliance on the low profile accounting treatment.

And suddenly the US has thrown a spotlight on the issue after Floyd Norris in the New York Times highlighted the anger that is brewing over Soc Gen’s approach.

He quotes former IASB and FASB member Anthony T Cope saying: ‘They are manipulating earnings.'

Norris’s question is who enforces the standards designed by the IASB? The board doesn’t have that power and nor does anyone else in Europe, on the face of it.

Here in the UK it’s arguable that the Financial Reporting Review Panel could have a tilt at it, if it was reported to them.

Surely the auditors would have something to say, but both Ernst & Young and Deloitte appear comfortable with the decision.

But the issue of enforcement touches another issue, that of US involvement in IFRS. The IASB is hoping to have the US fully on board with IFRS this year, but Soc Gen’s questionable use of the opt out must raise questions about the willingness to abide by the standards in Europe.

US observers may very well ask, 'Well, what happens if we abide by the standards and Europe doesn’t? Isn't that unfair?'

At the moment there still appears to be optimism at the IASB that everything is going as planned, but incidents like Soc Gen won’t help the cause.