McCreevy Mulling EU-Wide Initiative To Limit Auditor Liability

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

08 April 2005

Speaking at a conference held by the Institute of Chartered Accountants in England and Wales in Brussels on Tuesday, Internal Markets Commissioner, Charlie McCreevy revealed that he is considering limiting auditor liability on an EU-wide basis.

Following the introduction to the UK's Parliament last month by DTI Minister, Jacqui Smith of measures to limit the liability of auditors in the United Kingdom, Mr McCreevy announced that:

"I intend to ensure that in moving forward, the EU does so without stifling the economy and that only regulatory initiatives with real added value are undertaken. There should be no unnecessary red tape which will hinder entrepreneurship."

The Internal Maket Commissioner explained that his priorities for the accounting profession were the introduction of international standards in accountancy and auditing, equivalence of accounting standards throughout the world, and cooperation on the implementation of such rules.

However, he observed that:

"The difficult issue here is the provision of non-audit services. Some of the member states want a clear and immediate prohibition on the provision of non-audit services. Others want self-assessment by the audit firm, combined with safeguards to be put in place by and within audit firms and networks of audit firms. The current compromise text strikes a careful balance on this and leaves some flexibility for member states."

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