A European Auditing Authority (EAA)
should be set up to work in tandem with a network of national
auditing regulators, according to International Forum of
Independent Audit Regulators chair Steven Maijoor.

Maijoor’s idea of an EAA is based on the
three European supervisory authorities that were proposed last year
– the European Securities Market Association, the European Banking
Authority and the European Insurance and Occupational Pensions

“Auditing is one of the most important
pillars for well-functioning banking, insurance and securities
markets and… serious extraterritorial issues are inherent in the
oversight of internationally active audit firms,” Maijoor said at
an EC conference in February.

“International co-operation needs to
respond to these extraterritorial issues. Therefore, the EAA should
be given the responsibility for the authorisation and supervision
of certain audit firms with pan-European reach. This is especially
relevant for networks like Ernst & Young and KPMG that have
established legal entities bundling their activities in more than
one member state.”