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
‘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
‘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
‘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.
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