EU goes on the attack over audit regulation

The European Commission has opened nine case files as it attempts to force European Union (EU) member states to comply with EU accounting and auditing directives.

Brussels is taking four briefs to the European Court of Justice (ECJ) regarding Austria, Ireland, Italy and Spain, which it accuses of failing to comply with the 2006 statutory audit directive (2006/43/EC).

The directive was supposed to have been implemented across the EU by June 2008 and was designed to boost the quality of audits in Europe. Notably, it requires member state to establish external quality assurance and public oversight systems of the audit profession and encourages co-operation between financial regulators.

Criticising these countries’ alleged 'non-implementation' of the law, Brussels said the reform was important considering European 'corporate scandals in the past', such as the notorious Parmalat affair.

Meanwhile, the Commission has also formally threatened legal action at the ECJ against Belgium, Ireland, Greece, Luxembourg, Poland and Portugal for failing to properly implement the EU’s 2006 accounting directive (2006/46/EC). This extended disclosure requirements for companies regarding transactions with related parties, such as management and spouses of board members, plus off-balance sheet arrangements. These countries have been given two months to say how they will comply with the law or maybe an ECJ case.