BusinessBusiness RecoveryPCAOB chairman warns EC over company law opposition

PCAOB chairman warns EC over company law opposition

The chairman of the US accounting watchdog has welcomed proposals to strengthen financial reporting within the European Union, but warned that they are likely to face stiff opposition.

Link: PCAOB urged to take lead on auditor independence

Speaking today at Queens University in Belfast, Public Company Accounting Oversight Board chairman Wiliam McDonough endorsed the aims of the European Commission’s 8th Company Law Directive, comparing the move to regulations introduced on the other side of the Atlantic.

‘I believe that the goals of our system of oversight are the same goals that are contemplated in the proposed 8th Company Law Directive. The directive proposes, for the first time, external and independent oversight of auditors in a system that is required to be transparent, well-funded, and “free from any possible undue influence by statutory auditors or audit firms”.’

However he added that the proposals ‘will undoubteldy encounter opposition, particularly that rooted in fear of what some call over-regulation, or the fear that regulation will squelch the economic rewards of risk-taking we encourage in the business world’.

McDonough urged the EC to stay the course despite such opposition, in order to win back shareholders confidence in financial reporting.

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