Press Release: Restoring confidence in financial statements: the European Commission aims at a higher quality, dynamic and open audit market

The 2008 financial crisis highlighted considerable shortcomings in the European audit system. Audits of some large financial institutions just before, during and since the crisis resulted in 'clean' audit reports despite the serious intrinsic weaknesses in the financial health of the institutions concerned. Recent inspection reports by national supervisors have also criticised the quality of audits.

Under the proposals adopted on 30 November 2011 by the European Commission, this situation is to change by clarifying the role of the auditors and introducing more stringent rules for the audit sector aimed in particular at strengthening the independence of auditors as well as greater diversity into the current highly-concentrated audit market.

Furthermore, the Commission is also proposing to create a Single Market for statutory audit services allowing auditors to exercise their profession freely and easily across Europe, once licensed in one Member State. There are also proposals for a strengthened and more coordinated approach to the supervision of auditors in the EU. Taken together, all the measures should enhance the quality of statutory audits in the EU and restore confidence in audited financial statements, in particular those of banks, insurers and large listed companies.

European Commission: RAPID: MEMO/11/860: Statement by Commissioner Barnier on the proposals by the European Commission to reform the audit sector http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/11/860&format=HTML&aged=0&language=EN&guiLanguage=en

ESO: Background information: Big audit firms face Brussels onslaught http://www.europeansources.info/record/big-audit-firms-face-brussels-onslaught/

ESO: Background information: ‘Big Four’ accountants face audit reform http://www.europeansources.info/record/big-four-accountants-face-audit-reform/

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