Belgium, Austria and Germany – where heavy regulation is often favoured – have the union’s most tightly restricted accountancy professions.
The research emerges as debate surrounds the extension of regulation for accountants across Europe. Moves have emerged to create a new pan-European regulator as a way of fending off the attentions of the US Public Oversight Board which has shown signs of wanting to oversea accountants in Europe.
Under statistical indices developed by the Institute for Advanced Studies, Vienna, Belgian accountants have the top regulation burden of 6.3, while the laissez-faire Danes score a light 2.8, and Britain 3. Germany scored 6.1 and Austria 6.2.
The survey was based on responses from national professional associations, and assessed regulations on market entry and conduct. These included rules on fees, (fixed prices, minimum or maximum prices), advertising and marketing, inter-professional collaboration, geographical locations and practice organisation, for instance on the establishment of branch offices.
There was a wide spread of results in between, for instance France (5.8), Italy (5.1) and Spain (3.4). Ireland was level with the UK on 3, Scandinavian countries were liberal, with Sweden at 3.3 and Finland 3.5. For other smaller countries, the Netherlands scored 4.5, Luxembourg 5, and Greece 5.1. Figures were not available for Portugal.
The institute concluded that lower regulation was better, because there was evidence that it encouraged the growth in legal services, without leaving consumers unprotected.
There was evidence that low regulation regimes led to accountants earning less, but that there was a ‘proportionally higher number of practising professionals generating a relatively higher overall turnover’.
EU competition commissioner Mario Monti said: ‘Professionals would also gain from healthy competition. (They) may be better able to adapt their services and innovate to meet the evolving needs of the users.’
A new regulator for Europe has polarised member states of the European Union. The German audit body, Institut der Wirtschaftspruefer, has thrown its wait behind a new body which it envisages having five members approved by the EC.
UK auditors have so far said they have no interest in ‘another layer of regulation’ and have offered no support for the German backed plan.
The board would register all European audit firms, review the quality of oversight in EU states and file suits against national oversight bodies if necessary.
However, Europe is already looking as if it may be acting too late. Despite months of lobbying by UK accountants, the US Public Oversight Board has told the Securities and Exchange Commission that it wants all foreign accountancy firms working for companies listed in the United States to be registered there too.
It remains unclear the extend to which a registration programme would bring foreign auditors and accountants under the influence of broader US regulation. But the board has indicated it wants to register firms from Europe, Asia and the Middle East.
The UK is however, going through its own regulatory upheavels with apparent opposition from Europe. There is a powerful drive to win a cap for the audit liabilities carried by British audit firms. However, on a recent visit to London, internal markets commisson Frits Bolkestein made it clear that he felt unlimited liability provided a ‘driver for quality’.
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