EU and UK audit reforms hit by delays

Competition Commission postpones provisional findings until February while European reforms beset by political wrangling

23 Jan 2013 Accountancy Age

By Richard Crump


THE COMPETITION COMMISSION's probe into the Big Four's dominance of the UK audit market has been delayed for a second time, while a separate EU reform was also put back.

The much-anticipated provisional findings of the commission's investigation into whether PwC, Deloitte, KPMG and Ernst & Young exert an unfair grip on the audits of FTSE 350 companies are now due in mid-February.

A final report is expected in June, after the initial deadline for the provisional findings was postponed from November last year.

At the same time, the European Commission's own planned reform of the audit market has been beset by delays. The proposals, initially tabled by internal markets commissioner Michel Barnier, were expected to be voted on by the European parliament next month but have been delayed until June.

The proposals, currently being steered though parliament by Conservative MEP and rapporteur Sajjad Karim [pictured], were due be agreed by members of the European parliament's legal affairs committee (JURI) yesterday.

However, deep divisions remain over many of the measures, such as mandatory auditor rotation and the provision of non-audit services, with yesterday's meeting being punctuated by sharp exchanges between Karim and Spanish MEP Antonio Masip Hidalgo

At one stage, Hidalgo brandished a Spanish newspaper including a cartoon that heaped scorn on auditors as an example of the lack of public confidence in the profession. Karim responded that "today's paper is tomorrow's fish and chip wrapping" and "as responsible parliamentarians", it was the committee's duty to move forward with the proposals and not focus on "what is reported in the cartoons of newspapers".

A JURI meeting is scheduled for 20/21 February to discuss compromise amendments.

Visitor comments


Meanwhile Michel Barnier writes to lobby a fellow EU commissioner:

“One should not underestimate social and political unrest that may stem from the perception that the EU is aiming at dismantling bodies of professionals which are cemented by a strong corporate culture and a long history without it being absolutely indispensable for a well-functioning competitive market”.

But that is him lobbying to block the next EU directive on liberalising the railways so as to protect the chronically inefficient SNCF that has just been fined for anti-competitive practices.

is pathetique a French word?

Posted by John Holt, 23 Jan 2013




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