LAST WEEK, the Federation of European Accountants summoned the great and the good to put their heads together on some of the industry’s knottiest issues.
Keynote speakers included the dread commissioner Barnier (pictured) and James Doty, chairman of US regulator the PCAOB. Our very own Stephen Haddrill, head of the Financial Reporting Council, also held forth, and topics for discussion included the role of audit and building a European market.
So what did these giants of accountancy have to say? Starting with Barnier – as the firms are straining for any indicator of his plans – observers won’t be surprised to hear him trotting out his “status quo is not an option” line once again; reading between the none-too-subtle lines, the commissioner means business.
Again, he went straight for mandatory rotation, saying it is essential to find a balance between “excessive rotation that would damage audit quality” and auditor independence.
Perhaps more worrying for the Big Four, but welcomed by smaller peers, was his pronouncement on non-audit services; Barnier said they should be limited at the very least “or perhaps outlawed”, adding: “I wonder whether it might be necessary to go as far as proposing ‘pure audit firms’.”
Moving on to Doty before the firms start perspiring too hard; his three hot topics were the relevance and value of audit; auditor-client relationships; and the role of audit participants such as regulators.
Compared to Barnier’s trio of obsessions – auditor independence; reducing concentration; and boosting integration and supervision Europe-wide -auditors might wish they lived on the other side of the pond.
However, Doty wasn’t too soft of the industry, saying countries desperately need a more relevant and reliable financial information about risks, and for regulatory loopholes to be zipped up tight.
He touched upon the PCAOB’s recent proposals for the auditor’s reporting model, and waxed lyrical about the importance of cooperation between national regulators.
Haddrill’s speech is not available, but if the others are anything to go by, he will have trotted out some well-worn themes. All in all, perhaps little new from the big names, but a good chance for industry heavyweights to get together and further the debate on audit.
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