A new story at Accountancy Age by Rose Orlik, “EU green paper calls for softer stance on audit,” reports that a more balanced approach is being considered for auditors and the audit opinion. If this change sticks, then world-wide audit firms will rejoice.
Orlik writes, “An EU green paper on audit is currently being prepared, the investigation being headed by European Commissioner for Internal Market and Services Michel Barnier, considered by some to be radically pro-competition …” A green paper is a proposed government policy, in this case something that would be passed by the EU parliament and subsequently in force for companies participating in European capital markets.
Orlik also reports, “Syed Kammal MEP, Conservative shadow lead member in the legal affairs committee, said the revised paper supports ‘flexibility’ and is less drastic than initial proposals that called for mandatory rotation every eight years.” The changes result from intense lobbying by opponents to the status quo in audit. This opposition, obviously, is mostly from large audit firms and the companies they audit.
With billions of dollars of resources available in large audit firms to fight reform, it is difficult to imagine that any changes will ever be made to the audit model or to the audit function.
Debit and credit – - David Albrecht