US Accounting Watchdog Chief Welcomes EC Company Law Moves

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

23 September 2004

Speaking at the International Colloquium on Corporate Governance at Queen's University in Belfast on Monday, chairman of the US Public Company Accounting Oversight Board, William McDonough praised the efforts of the European Commission to improve corporate governance in the EU, but warned that the Commission is likely to face opposition from the business community.

Speaking with regard to the EC's planned 8th Company Law Directive, Mr McDonough told those attending the meeting that:

"I believe that the goals of our system of oversight (in the US) are the same goals that are contemplated in the proposed 8th Company Law Directive. The directive proposes, for the first time, external and independent oversight of auditors in a system that is required to be transparent, well-funded, and 'free from any possible undue influence by statutory auditors or audit firms'."

However, he went on to add that the planned directive "will undoubtedly encounter opposition, particularly that rooted in fear of what some call over-regulation, or the fear that regulation will squelch the economic rewards of risk-taking we encourage in the business world".

The PCAOB chief urged the EC to stand its ground against such opposition, arguing that the tougher measures are necessary to win back shareholder confidence.

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