The French accounting regulator has refused to bring its audit rules into line with EU law and looks set for a courtroom showdown with the European Commission.
The regulator, Haut Conseil Du Commissariat aux Comptes, has not backed down on its rules despite an EC demand that they change their rules or face a court case in the European Courts of Justice. Instead it is arguing that its rules contravene no EU laws.
The Internal Markets Commission assessed French audit rules, following complaints from the top six firms who claim that France’s law restricts their rights to offer advisory and assurance services in other territories.
French rules prevent accounting networks conducting non-audit work for a company elsewhere in the world, if they have carried out an audit of the same company in France.
Firms are also prevented from auditing a French company’s accounts if they have provided advisory services to the company in the two years preceding a proposed audit.
The rules contravene the Treaty of Rome, which originally set up the Common Market in the 1950s.
A source close to the top six firms said this week that the French have given an answer which amounts to thrashing the matter out in court.
‘The EC gave them two months to reply. The French have now effectively said, “we’ll see you in court.” It seems they’re seeking to argue that their law is consistent with European law,’ the source said.
A spokesman for the Internal Markets Commission, tasked with handling the issue, confirmed that the French had responded but could not reveal the details of their response.
‘No immediate decision has yet been taken on whether it will be going to
court.
‘Their response is still confidential at this time. Our lawyers are checking
through their response,’ the spokesman said.
This is the second time the French have refused to change their rules, after firms in 2006 issued a court challenge but had it rejected by the Conseil d’Etat, the French high court.
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