opts for caution on familiar issues
Choice in the audit market, the Eighth Company Law Directive and
simplification are three current topics of discussion at committee
level within the EC, according to the EC Director of Free Movement
of Capital, Company Law and Corporate Governance, Pierre
Delsaux represented the EC Internal Market and Services
Directorate General at the European SME/SMP congress in the
Netherlands early this month. He told the congress the commission
has yet to decide whether to accept global auditing standards.
Delsaux said suitable global standards would be preferable to
national standards, however, the EC will “not buy anything without
He added that audit choice is a “major concern” and that it is
important to have “real choice” at all levels of the market. This
is not a matter of favouring particular firms, Delsaux explained,
but rather an important criterion for a well-functioning
In terms of facilitating audit choice, Delsaux questioned the need
for change to audit firm ownership rules. “There is no clear-cut
solution,” he noted, questioning whether change to the rules would
create more choice, or whether it could potentially “destroy the
Alongside the choice debate, Delsaux also raised the issue of
auditor liability. He said there would be no adoption of a “binding
rule” at commission level. “The decision is whether to adopt a
non-binding rule,” he said, adding that the decision must be made
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Delsaux said he believes the Eighth Company Law Directive is
positive because it is a legal framework that creates certainty in
all member states. “The real question will be seeing how it is put
into place,” he conceded, adding that it is difficult to say what
the final advantages or disadvantages are because much of the
directive is still being implemented.
In line with the directive, Delsaux said, creating public oversight
boards (POBs) in all EU states is important. “But it is also
important to not create too much regulation, therefore the way the
POBs are established is important,” he added.
Delsaux stressed that simplification is important and questioned
whether there was a need for commission directives that deal only
with domestic issues. He raised several questions, including
whether more options – for example, on the matter of SMPs – should
be left to member states, whether audit should be imposed at all
levels, and whether simplification is better served by
harmonisation or by giving more freedom to member states.