Urges consistent implementation across Europe
Washington, DC – The Center for Audit Quality (CAQ) issued the following statement by Executive Director Cindy Fornelli in reaction to the European Parliament’s plenary approval of audit market reforms:
“The measures adopted by the European Parliament today encompass sweeping changes to the audit market. While some provisions will strengthen financial reporting and improve corporate governance, the CAQ has expressed its concerns that other requirements, particularly severe limits on non-audit services and mandatory audit firm rotation, will undermine the role of independent audit committees acting on behalf of shareholders and reduce choice in the marketplace.
“Looking forward, we are concerned that the implementation of these reforms will generate inconsistencies across jurisdictions, which could affect companies and their auditors in the United States, where the idea of mandatory firm rotation was recently considered and set aside for sound public policy reasons.
“We hope that these new rules can be implemented with the greatest consistency possible across Europe with minimal extra-territorial impacts.”
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About the CAQ
The Center for Audit Quality (CAQ) is an autonomous, nonpartisan public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness and responsiveness to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of Certified Public Accountants. For more information, visit www.thecaq.org.