The European Commission has launched a consultation on the independence of auditors and the reliability of statements after the banking crisis raised quest-ions about the sector’s veracity.
The consultation paper also examines the potential for any systemic risk due to concentration in the sector.
EC internal market and services commissioner Michel Barnier says: “The veracity of financial statements is central to confidence in the marketplace. The crisis highlighted failings in the audit sector, we need to see what improvements can be made.”
Ernst and Young was accused of “professional malpractice” over its auditing of Lehman Brothers in a report by American law firm Jenner & Block.
This month, the Accountancy and Actuarial Discipline Board opened a second investigation into E&Y’s auditing of Lehman.
The EC will examine the role of national supervisors, as well as enhanced harmonisation of rules and the possibility of a European passport for auditors.
Economic and monetary aff-airs policy committee chairman and Liberal Democrat MEP Sha-ron Bowles says: “In the future, we will be looking at having more linkages between the auditor and supervisory authorities. Auditors seem to have got away quite lightly.”