Europe Contemplates Sweeping Audit Reform

Source: Accounting Today

Everyone's talking about audit reform, and now the European Union may do something about it. Recently, the European Commission proposed legislation designed to delineate the auditor's role and enhance auditor independence. Among other things, the proposed law would:

• Generally prohibit auditing firms from providing non-audit services to audit clients;
• Require large audit firms to separate audit and non-audit services to avoid conflicts;
• Mandate audit firm rotation, every six years (nine years for joint audits), for public companies, with a four-year cooling-off period before an audit firm can engage the client again; and
• Create a single market for audit services, enabling auditors licensed in one member state to practice throughout Europe.

For the complete article, read “Is reform just across the pond?”

From Accounting Today, January 1, 2012, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.