LONDON (Reuters) - Britain should not go it alone by adopting its own book-keeping rules after it leaves the European Union, though the global regulations in place could be tailored, the country’s accounting watchdog said on Friday.

A general view is seen of the London skyline from Canary Wharf in London, Britain, October 19, 2016. REUTERS/Hannah McKay

Listed companies in the EU are required to apply the accounting standards adopted by the International Accounting Standards Board, which has its headquarters in London.

Once Britain leaves the EU it would have a choice whether to apply them. Some British politicians and investors have said the IASB rules, known as IFRS, exacerbated the financial crisis and lack rigour.

“Brexit could have significant implications for the adoption of international financial reporting standards depending on the exit arrangements negotiated by the government,” Paul George, executive director for corporate governance and reporting at the Financial Reporting Council, said,

“The FRC continues to support the application of a single set of high quality global financial reporting standards for listed companies.”

IASB Chairman Hans Hoogervorst said Britain would be giving an “extraordinary” signal to the world if it ditched IFRS rules that are being applied by more than 100 countries.

“I don’t expect that to happen,” Hoogervorst told Reuters.

He also said it would also be “odd” for the IASB to remain in London if Britain turned its back on IFRS.

But post-Brexit, he does expect Britain to set up its own process for endorsing IFRS rules for formal use by listed companies.

“They will have a true endorsement process like Europe has with a positive attitude to endorse unless we produce something they consider crazy,” Hoogervorst said.

The FRC said it would identify potential risks to the accounting framework at the point Britain leaves the EU and afterwards, and consider opportunities for improvements.

The FRC’s comments were included in a review of company reports in Britain, which found that financial statements were generally good but needed to inject more balance in their reporting of performance.

“Trust is eroded by excessive or inappropriate use of underlying profit figures, alternative performance measures, and failure to acknowledge when things haven’t gone as well as expected,” the FRC said.

The watchdog, which has powers to fine individual accountants and their firms for falling below auditing standards, reviewed 192 company reports up in the year to March.

“We wrote to 33 companies to alert them that we will review their tax disclosures in their next annual report and accounts in order to encourage more transparency,” the FRC said.

The report did not name companies or their auditors and said most companies concerned had agreed to resolve the issues.

“Disappointingly, no FTSE 100 company that we reviewed stood out as a role model in this area of reporting,” it said, referring to tax disclosures.