European Commission announces EU audit reform in 2022
Mairead McGuinness, European Commissioner for financial services, announced on 27 May that the European Commission (EC) will make a proposal for EU audit reform before the end of 2022. The process will start with a consultation after this summer.
The announcement came as part of the Commissioner’s speech at the webinar ‘Corporate Reporting in the EU’s Capital Market Union After Wirecard’. She made the following key points:
- Wirecard is only the latest in a succession of unacceptable scandals that have undermined trust in capital markets and audits
- We need a systemic response building on three lines of defence: corporate governance, audit and supervision – i.e. the corporate reporting ecosystem
- On audit, the key points were around the need to improve audit quality and on audit market concentration in the public interest entity (PIE) audit market. The Commissioner underlined that these issues were not new and now needed to be resolved
As said, the EC will launch a public consultation to assess the different measures to improve the ecosystem. In addition, it will consult Member States on their experiences to learn from them, focussing on their different national regimes and measures aimed to address the issues at stake. It is also expecting the outcomes of a study on the EU Audit Regulation and Directive functioning.
The recording of the webinar is available here and the write-up of the speech is available on the EC’s website