The European Commission’s audit reform package, set to be
announced tomorrow, could be trimmed from its leaked draft form
with concessions on non-audit services and mandatory firm rotation,
International Accounting Bulletin understands.
An industry source told this publication that
instead of an outright ban on non-audit services to audit clients
there could be a cap, restricting the amount of non-audit work can
bring in to 10% of audit fees.
The two other proposals that have received the
strongest resistance in Brussels are mandatory firm rotation every
nine years and join audits.
It is understood EC internal markets services
commissioner Michel Barnier is keen to push through both proposals
in some form but may extend the mandatory rotation period to 12
years, under certain circumstances, if companies choose to have a
joint audit. If this is the case it would appear that joint audits
may be optional.
Barnier’s audit reform package announcement
has already been delayed by a week as it had received stiff
resistance from commissioners. It is believed a strong voice
against some of the proposals is Germany’s Günther Oettinger, the
EC’s Commissioner for energy. It is still not 100% clear if the
audit reform package be unveiled, as planned, although the EC’s
media office said an announcement will be made tomorrow at
midday.
The International Accounting Bulletin
will have comprehensive coverage of the EC audit reform announcement from 11 GMT, including
a live blog.
Coverage will include any announcements as
well as the views of leading industry figures from the Big Four and
mid-tier firms.
