Press Release: Auditing: Commission issues Recommendation on independence of statutory auditors

The European Commission issued a Recommendation on 'Statutory auditors' independence in the EU' on 16 May 2002. The Recommendation features a set of demanding high-level principles. For example, if an auditor has any relationship with their client that might compromise the auditor's independence an audit should not be carried out. The Recommendation deals with two key independence issues raised by the collapse of Enron, namely 'provision of additional services' by auditors and their 'employment with the audit client'. Although the Recommendation is not legally binding, it will serve as a clear benchmark of good practice that the Commission expects to be immediately applied throughout the EU audit industry. In three years time, the Commission will review how the Recommendation has been applied in practice and will consider whether binding EU legislation may then be required. However, the Commission may act earlier if it is not satisfied with Member States' application of the Recommendation.

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