EU audit reform — all change

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The topic of audit rotation and reform has been debated for the past decade and on 17 December 2013 the European Parliament voted to accept the European Commission’s revised proposals for audit reform. This ended a long-standing impasse between the EU Council, the EU Parliament and the European Commission that had blocked reform since the original proposals had been made in 2010.

A final vote on the new proposals is to take place later this month (February 2014) after which the proposals will become law or a directive to all member states.

The proposals have been welcomed by the Financial Reporting Council (FRC) as opening the audit market to greater competition. They now follow the UK Competition Commission’s introduction, in October 2013, of a requirement for companies to mandatory tender every 10 years (with those that tender less frequently required to set out clearly when an audit would be put out to tender)…

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