RegulationAccounting StandardsEC slammed for slack approach to auditor liability

EC slammed for slack approach to auditor liability

EC has been slammed for its slack approach to auditor liability and urged to set up its efforts on auditor quality

The International Corporate
Governance Network
, representing about ?7.5trn in assets, has urged EC for a
Europe-wide review of audit services after its recommendation in June to cap
auditors’ liability.

In a letter to Charlie McCreevy, internal market commissioner, and Neelie
Kroes, competition commissioner, the ICGN urges the commission ‘to step up its
efforts to ensure that the market for audit services in Europe, especially to
large listed entities, becomes more competitive and more focused on audit
quality’.

The letter called on the EC to emulate efforts in the US and the UK aimed at
building ‘a better understanding of the competitive dynamics of the market for
audit services in Europe and their relation with audit quality’.

‘Simultaneously, the commission could consider the possibility of new policy
initiatives regarding audit firms’ transparency and public disclosures (beyond
the requirements of Directive 2006/43/EC, which we consider progress but still
insufficient), regarding ownership and liability,’ the letter said.

Further reading:

Lib Dems want ‘accountant’ term protected

Deloitte happy with EC’s decision on audit market

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