EU independence standard required
The European Commission should ensure that a uniform standard of auditors' independence is adopted throughout Europe as soon as possible, according to the ICAEW.
Responding to the commission’s consultative paper, Statutory Auditors’ Independence in the EU: A Set of Fundamental Principles, Institute president Graham Ward, said: ‘The effectiveness of the requirement for auditors to demonstrate that a responsible conclusion has been reached [on independence] will be enhanced by the Commission’s promotion of quality assurance on a Europe-wide basis.’
Ward added that he strongly endorsed the proposal that a principles-based approach should be applied, believing it to be more effective than a rules-based approach.
The commission issued the consultative document in December last year and the deadline for responses is this Friday (2 March).
Ward expressed concern over the announcement that member states’ independence rules should at least meet the fundamental set of principles in the proposals.The institute believed the recommendation should not be seen as a minimum set of rules but as a uniform standard that member states and professional bodies should move towards.
The institute is concerned that individual EU states should adopt the spirit as well as the letter of auditor independence, though recognised the need for tough monitoring.
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