Brussels, 18 November 2008
The European Commission has launched a public consultation on control structures in audit firms and on the possible ways forward. This follows an independent study on the ownership rules of audit firms and their consequences for audit market concentration (IP/07/1570). The purpose of the consultation is to examine possible ways for finding catalysts to stimulate the emergence of new players in the international audit market. This may include deregulation of the capitalisation of audit firms (unbundling) and other catalysts related to human capital of audit firms. The Commission invites stakeholders to give their views on the issues involved by 28 February 2009.
Internal Market and Services Commissioner Charlie McCreevy said: "European capital markets have become much more integrated in the last few years. However, the European Union seems to face fragmented audit markets. In order to ensure a sustainable international audit market, more players are needed to meet the demand by international companies. This is especially true in the light of the current financial turmoil, which might also contribute to widening the existing gap between the Big 4 and the mid-tier audit firms. We all need to think of how to bring new capital into the audit profession. Some have suggested that we should do away with ownership restrictions in audit firms and allow other players – not only audit partners – to invest in an audit firm. Audit firms fear that such relaxation could reduce the quality of audits and pose a risk to auditor independence. I want to hear more about both sides of the argument.. I encourage all those who have a view or experience in this field to share it with us."
Possible ways forward
In October 2007, the Commission published a study prepared by Oxera. On the basis of this study, the Commission invites stakeholders to give their views on two possible options for opening up the international audit market:
More information is available at: