Press release

18 December 2013

News Release: FEE comments on the announced agreement on European audit reform

 

For immediate use: 18 December 2013

Following yesterday announcement by the Lithuanian Presidency and the European Commission that the member states and the European Parliament had reached a compromise on the controversial audit reform proposed by the European Commission in 2011, the COREPER confirmed today its agreement on the audit reform. A formal approval in the Council and a plenary vote in the EP are expected shortly and will finalise the legislative process.

It is good that this debate comes to an end as it has delayed firms’ decisions on strategy, business model, investment and recruitment for three long years. However we note that a number of significant question marks remain outstanding.

In particular, it is disappointing that, for the sake of reaching agreement, the European Institutions failing to agree on truly European solutions adopted a regulation (i.e. an instrument that is directly applicable in the member states without transposition) that contains many options including on major issues such as the list of prohibited non audit services and the duration of mandatory rotation: leaving the member states free to diverge on such matters is a significant step backwards for the furtherance of the internal market; moreover this will add unnecessary costs to the European economy. The adoption of the principles and list of prohibited non audit services of the IESBA Code could make the prohibitions more efficient and internationally workable.

FEE has long promoted and continues to support a European adoption of ISAs that is instrumental to sustain audit quality. This could have been achieved seven years ago should the European Commission have used the powers that the 2006 Statutory Audit Directive was granting it. It is regrettable that there will be no European adoption involving the main stakeholders and that this could result in carve-ins and carve-outs at the detriment of the internal market and an international level playing field.

FEE will analyse in detail the provisions once finally approved and available. The profession will take stock of the changes that are being put forward and engage on how they can be best implemented in practice while working to preserve audit quality. Business, national legislators and regulators and the profession will have to work together to limit unnecessary administrative costs for the European economy and audit firms.

Once these proposals become the future framework, the European accountancy profession is committed to meet the resulting requirements while continuing to enhance quality and to work to the highest standards.

Related files:

News Release

 

Related content

EventEurope’s economic situation under COVID-19

30 June 2020

EventThe EU’s fight against financial crime: Diving into the Anti-Money Laundering Action plan

10 June 2020

UpdateTax Policy

29 May 2020

UpdateSME Update

26 May 2020

UpdateTax Policy

15 May 2020

NewsAccountancy Europe supports new EU action against money laundering

8 May 2020

UpdateAudit Policy

7 May 2020

UpdateTax Policy

30 April 2020

UpdateSustainable Finance

28 April 2020

UpdateSME Update

23 April 2020

UpdateTax Policy

17 April 2020

NewsAccountancy profession encourages renewed Sustainable Finance Strategy

9 April 2020

PublicationAudit exemption thresholds in Europe

9 April 2020

UpdateTechnology

8 April 2020

Consultation responseIESBA’s exposure draft on proposed revision to the code addressing the objectivity of engagement quality...

7 April 2020

UpdateAudit Policy

6 April 2020

UpdateTax Policy

3 April 2020

Consultation responseEC’s consultation on the Directive for Administrative Cooperation in Direct Taxation

2 April 2020

PublicationCoronavirus crisis: 15 actions for governments to protect European SMEs

27 March 2020

Podcast Reforming the tax system

27 March 2020

Sign up for our newsletter