EU Mulling Government Oversight Of Auditors

by Ulrika Lomas, for LawAndTax-News.com, Brussels

13 December 2004

Despite the strong support expressed by European finance ministers at the recent ECOFIN meeting for proposals which would end the self-regulation of auditors in the EU, the planned measures are likely to cause controversy when they go before the European Parliament, observers have suggested.

Under the proposals, supported by all EU members except for France (which abstained from the vote) and Finland and Estonia (which voted against them), the groundwork would be laid for the creation of national bodies to oversee auditors, in a similar vein to the Public Company Accounting Oversight Board (PCAOB) in the United States.

However, the legislation also paves the way for the possibility of preventing accounting firms from providing non-audit services to their audit clients, a provision deemed likely to cause a split in the European Parliament by some commentators.

Stringent audit-firm rotation requirements are also expected to create a divide between MEPs.

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