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FEE criticises media coverage of EC draft proposals

Media coverage of the leaked EC Green paper draft audit proposals is misleading, according to the Fédération des Experts-comptables Européens (Federation of European Accountants – FEE).

The FEE warned the media against focusing on audit market structure alone, “some media’s reports are potentially damaging and imply a significant increase in administrative burden and cost, both on business and audit firms, without any significant corresponding benefit accruing”.

Federation said some of the proposals could damage audit quality, which goes against serving the public interest, which is especially important “at a time where growth, innovation and job creation should be fostered”.

The FEE hopes the democratic legislative process within the European Parliament and European Union member states will provide an opportunity to rebalance the Michel Barnier’s proposals so the legislation promotes audit quality helps develop the market to become more vibrant and supports independence.

“Audit policy should not ignore the important role played by accounting bodies in enhancing audit and financial reporting quality, addressing the needs of Small and Medium-sized enterprises, representing the interests of Small and Medium-sized Practitioners and reducing the current pressure on business,” the FEE said.

The EC’s draft proposals include mandatory audit firm rotation, the banning of non-audit services, joint audits, audit quality certification, expanded audit reports and EU oversight reform. The official proposals are due to be made public in November.

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