The European Union has backed away from introducing mandatory in-house audit
committees after months of lobbying from industry.
The plans would have placed companies under a set of onerous rules forcing
them to set up internal audit committees, and outline the composition and
timescale of the directors serving on them.
Under a compromise deal, reported by the Financial Times today, the
EU rules will still determine the functions of an audit committee, but companies
will be able to opt out if they can prove the use of a ‘similar body carrying
out equivalent functions’.
The CBI had argued that the UK already has strong audit rules and the plans
were potentially more onerous that Sarbanes-Oxley. EU commissioners indicated in
July that they would be willing to compromise if the ‘audit function could be
The EU should now publish a pan-European directive in October. This will outline
the rules that will force companies to rotate the partners of their audit firms
to prevent the type of fraud seen in Enron and Parmalat.
The directive will also contain a commitment to investigate whether
accountancy firms should be given legal protection against negligence claims.
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season