PracticeAuditEU goes on the attack over audit regulation

EU goes on the attack over audit regulation

Commission turns to European Court of Justice to enforce audit directive

The European Commission has opened nine case files as it attempts to force
European Union (EU) member states to comply with EU accounting and auditing
directives.

Brussels is taking four briefs to the European Court of Justice (ECJ)
regarding Austria, Ireland, Italy and Spain, which it accuses of failing to
comply with the 2006 statutory audit directive (2006/43/EC).

The directive was supposed to have been implemented across the EU by June
2008 and was designed to boost the quality of audits in Europe. Notably, it
requires member state to establish external quality assurance and public
oversight systems of the audit profession and encourages co-operation between
financial regulators.

Criticising these countries’ alleged ‘non-implementation’ of the law,
Brussels said the reform was important considering European ‘corporate scandals
in the past’, such as the notorious Parmalat affair.

Meanwhile, the Commission has also formally threatened legal action at the
ECJ against Belgium, Ireland, Greece, Luxembourg, Poland and Portugal for
failing to properly implement the EU’s 2006 accounting directive (2006/46/EC).
This extended disclosure requirements for companies regarding transactions with
related parties, such as management and spouses of board members, plus
off-balance sheet arrangements. These countries have been given two months to
say how they will comply with the law or maybe an ECJ case.

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