The rules ­ challenged in France last year ­ are now being disputed internationally because they are being applied across territorial boundaries. This would mean firms employed by French companies may not be able to work for them in a non-audit context in the UK.

This is the second attempt to overturn French legislation ­ after a failed effort last year when their challenge was rejected by the Conseil d’Etat, the French high court.

The firms claimed that a code ­ written by the French accounting regulator Haut Conseil Du Commissariat aux Comptes ­ prevented them from auditing a French company’s accounts if it had provided advisory services to the company in the two years preceding the proposed audit.

The problems are especially acute since French companies have two auditors. A Big Six source said this has now become a case of territorial ‘infringement’ ­ which could consequently affect UK firms performing advisory and other non-audit work for French companies in other jurisdictions.

‘They’ve taken the rules on auditor independence in the Eighth Directive too far,’ the source said.

This week a Brussels official confirmed that the large six firms had brought the matter to the attention of the Internal Markets Commission.

‘They have indicated a long list of prohibitions in the French law, which they say go beyond the requirements of EC law regarding audit and non-audit services.

‘We are in the process of examining French legislation in order to assess the concerns of the firms. We have not yet made a decision in terms of whether this could be a case of an infringement.

‘But the firms hold serious concerns. We hope to make a decision in the coming weeks,’ he said.

Another large firm source confirmed that lawyers had assessed the case of the firms.
‘Legal opinion is that the French law also contravenes the Treaty of Rome, whic h originally set up the common market in the 1950s, as well as the Eighth Directive,’ he said.