PracticeAuditAudit watchdog warns of EC reform dangers

Audit watchdog warns of EC reform dangers

An audit think tank has responded to European Commission plans to reform the audit market in Europe with warnings on business competitiveness and auditor liability.

Link: EU deadline for audit standards is ‘unrealistic’

The European Group of International Accounting Networks cautioned that the EC-proposed scheme must guard against excessive costs to the million businesses audited in the EU each year.

EGIAN, which represents the interests of international networks of firms outside the Big Four, said the proposals must not be allowed to undermine competitiveness and should act to foster more open competition among audit firms.

EGIAN chairman and Robson Rhodes technical partner Anthony Carey said: ‘These businesses form the backbone of the European economy and provide significant employment. The new system must be relevant for them as well as for the 7,000 listed companies.’

The group also called for urgent reform in the field of auditor liability. It warned that the auditor should not be seen as an insurer against corporate failure and said there was already a real threat of a large firm withdrawing from the audit market further reducing competition in the profession.

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