The European parliament has approved the Eighth Company Law Directive.
Dubbed as Europe’s answer to Sarbanes-Oxley, the directive sets out
requirements on auditors including the publication by auditors of an annual
transparency report, a requirement for audit partners to be rotated at least
every five years and quality assurance reporting for audit committees and
ECOFIN, the committee of all 25 European finance ministers, will now have to
approve the directive before it can become law.
David Devlin, president of the Fédération des Experts Comptables Européens,
the representative organisation of the accountancy profession in Europe, said:
‘The accountancy profession welcomes today’s decision of the European
parliament. The reforms are supportive of high quality audit and will drive the
further harmonisation of audit practice.’
‘The accountancy profession particularly welcomes proposals on key issues
such as application of international standards on auditing (ISAs), quality
assurance, audit committees and new arrangements for public oversight of the
profession which underpin audit quality in the EU,’ Devlin added.
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