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

“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.