Battle brewing over new rules for auditors

Proposed restrictions on auditing firms are likely to spark a fight between the European Parliament and Commission as legislators finalise a report on the issue in April.

The target of heavy lobbying, the blueprints include controversial mandatory rotation provisions for audit firms and limitations on the non-audit services they can offer clients.

The original proposals – published by the Commission in December 2011 – pushed for a six-year cap on how long an audit firm could work with a corporate client. They also called for new rules to strengthen audit reports.

The measures followed the failure by auditors to predict the major banking collapse of 2008, leading to criticism that they had become too close to their clients.

• Primary Source

European Commission: Press Release: Reforming the Audit Market - Frequently Asked Questions http://europa.eu/rapid/press-release_MEMO-11-856_en.htm?locale=en

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