Annual accounts and consolidated accounts - Audit - public interest entities

The EESC reflects in the opinion its view on two Commission proposals: COM(2011) 778 final - 2011/0389 (COD) and COM(2011) 779 final - 2011/0359 (COD).

Key points:

  • The EESC endorses the draft directive. It is consistent with the Committee's GPO. There are also many aspects of the regulation which the EESC does endorse.
  • The purpose of the regulatory format appears to be two-fold: to introduce fundamental changes onto the audit market and to prescribe in considerable detail the procedures relative to company audits and the relationships between the board and the audit committee.
  • The EESC disagrees with the proposal for audit only firms. The formula to determine when an audit firm is disbarred from offering any non audit services should be discarded.
  • As in any EESC opinion, the position of SMEs has to be considered. If an SME has shares listed on a stock exchange, it is defined as a public interest entity and therefore subject to the extensive and prescriptive provisions of the regulation which are clearly designed for the audit of banks.
  • Little account has been taken of the EESC recommendation that audit reform should be integrated with the recommendations on corporate governance. There is no discussion of the way in which both statutory auditors and audit committees should improve stakeholder and shareholder communication.

Earlier EESC opinions:

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