No 12 (May 98/Mai 98/Mai 98)

A Communication on the future direction of statutory auditing in the EU has recently been adopted by the European Commission. It outlines a work programme, the main areas of which will be reviews of auditing standards, audit quality control systems and rules on auditor independence. This work, to be carried out mainly in the framework of a new Committee on Auditing, will aim to improve the quality and consistency of auditing throughout the Member States, thus providing more certainty to users of financial reports, including investors, creditors and employees and encouraging cross-border investment. The Commission does not envisage new legislation or amendments to existing legislation at this stage but will not hesitate to come forward with legislative proposals should this prove necessary.

Audit regimes in the EU can differ significantly between Member States, making it difficult for investors and other users to make meaningful comparisons. This can in turn act as a brake on cross-border investment and so handicap the development of the Single Market. This problem risks being more apparent following the introduction of the euro.

The auditing Communication reflects the conclusions of a wide ranging consultative process based on a 1996 Green Paper (see SMN N° 5) which indicated a consensus amongst the Member States, the European auditing profession and users of audit reports in favour of action at Community level in the auditing field. An essential feature of the work programme set out in the Communication is the co-operation and involvement of Member States, the auditing profession and users. This will be achieved by setting up a Committee on Auditing, comprised of experts nominated by the Member States and representatives of the European auditing profession. The Commission will also involve those using and preparing accounts by consulting the existing Accounting Advisory Forum.

The Committee's first tasks will be to examine reports from the profession, represented by the Fédération Européenne des Experts Comptables (FEE), on audit quality monitoring systems in the Member States (currently some EU countries lack such systems), on the application of auditing standards and on a set of core principles to govern auditor independence. The Communication makes clear that the Commission will not hesitate to propose legislative measures if the work of the Committee were to show that the profession's self-regulatory efforts were not producing the desired results.

The Committee will also undertake an urgent review of how International Standards on Auditing developed by the International Federation of Accountants (IFAC) are being applied in the Member States. The review will aim to determine whether these Standards meet adequately EU requirements for auditing standards or whether there are gaps to be filled. In addition, the Committee will seek to ensure a more active and concerted voice for the EU in the agreement of international standards and guidelines.

In the context of corporate governance, there is general agreement that there is scope for strengthening the position of the statutory auditor within the corporate structure and that corporate entities themselves should place more emphasis on internal systems of control for managing and reporting risk. The role of the auditor in relation to corporate governance will therefore be highlighted in the forthcoming Communication on Company Law in the Single Market.

On professional liability of auditors, the Commission will examine in more detail the various concepts that play a role in the determination of the civil liability of the statutory auditor in Member States. It will then be in a better position to judge whether an initiative to harmonise rules on professional liability is necessary. A large majority of respondents to the Green Paper considered that such harmonisation was impossible and unnecessary but the accounting profession claimed that harmonisation was important to ensure different Member States' rules do not give rise to obstacles to exercising auditing services within the Single Market.

The freedom to provide auditing services throughout the EU is particularly important for smaller firms of auditors and individual practitioners. The Communication concludes that the effective implementation of the Directive establishing a general system of recognition of higher education diplomas (89/48/EEC) is an essential component of exercising this freedom. Practical difficulties arising from freedom of establishment and freedom to provide services in the auditing field will be discussed with Member States in close association with the accounting profession. The feasibility of a sectoral Directive for auditors will be further examined by the Commission and would be envisaged if it constituted an improvement over the general system Directive and enjoyed the support of both the profession and Member States.

Die Europäische Kommission hat kürzlich eine Mitteilung über die Abschlußprüfung in der EU vorgelegt. Damit zeichnet sie ein Arbeitsprogramm vor, in dessen Rahmen hauptsächlich Standards und Qualitätskontrollen bei der Abschlußprüfung sowie die Unabhängigkeit von Abschlußprüfern untersucht werden sollen. Diese Maßnahmen, die vor allem mit Hilfe eines hierfür zu schaffenden Ausschusses durchgeführt werden sollen, zielen auf eine Verbesserung von Qualität und Kohärenz der Abschlußprüfung in allen Mitgliedstaaten ab. Sie dürften damit potentiellen Benutzern von Finanzinformationen, u.a. Anlegern, Gläubigern und Beschäftigten, einen höheren Grad an Verläßlichkeit verschaffen. Die Kommission sieht im Bereich der Abschlußprüfung gegenwärtig keinen Bedarf für neue Gesetzgebungsmaßnahmen bzw. Änderungen der bestehenden Gesetzgebung.

La Commission européenne vient d'adopter une Communication sur le contrôle légal des comptes dans l'UE. Elle fixe la "marche à suivre" à travers un programme de travail prévoyant notamment l'examen des normes internationales de contrôle légal, les contrôles de qualité de l'application des normes et le principe d'indépendance des contrôleurs légaux. Effectués dans le cadre d'un nouveau Comité sur ces questions, ces travaux viseront à améliorer la qualité et la cohérence des audits dans tous les États membres. Ils devraient fournir davantage de garanties aux utilisateurs des rapports financiers, y compris les investisseurs et les créanciers. A ce stade, la Commission envisage une réforme sans nouvelle législation, ni amendements à la législation existante.

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