PracticeAuditEU pushes for spring audit deal

EU pushes for spring audit deal

The European Union's outgoing Dutch presidency has predicted that a quick agreement could be achieved with the European parliament this spring over the proposed directive on improving statutory audit controls.

Link: Big Four finds lucrative market in Europe

Its confidence was based on a common approach agreed before Christmas by EU finance ministers, which will now be presented to MEPs. EU president Jan Peter Balkenende is hopeful the legislation can be agreed in one reading, instead of the usual two.

The proposed legislation was drafted in the wake of the Parmalat and Ahold scandals, and was designed to ensure auditors are ‘independent from the audited entity and not in any way involved in management decisions’.

If MEPs and ministers agree, they could be banned from conducting audits if any relationship or additional services ‘might compromise (their) independence’.

The Dutch government said: ‘Probably the agreement among ministers is a good basis to reach an agreement with the European parliament in a common first reading.’

This would allow the directive to come into force in the middle of 2005, with member states then having 24 months to comply. ‘The directive should contribute to restoring confidence in the quality of statutory audits and, with that, in the financial data of enterprises,’ said the Hague.

The introduction of the directive could also be beneficial for European auditors working with US clients. At a recent speech in Brussels, William McDonough, chairman of the US Public Company Accounting Oversight Board, said the aims of the directive ‘mesh quite well with the oversight system we are putting in place’.

He added that influential parties in the US recognised the huge steps Europe was taking in introducing new safeguards for audit. A favourable response to the audit directive in the US could see the burdens of registration with the PCAOB reduced significantly.

French finance minister Herve Gaymard abstained from the vote on the draft directive. In particular the French want rules to prevent accountants from providing other consulting services to clients they audit.

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

7d Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

2w Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

2m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter