17 March 2011

FEE Comment Letter on the European Commission's Consultation Paper on the Professional Qualifications Directive

FEE stated that recognition of professional qualifications delivered in another EU Member State is indeed essential to establish an internal market for professional services. FEE fully supports the European Commission’s objectives of simplifying the existing rules to the benefit of individual citizens, integrating professions into the Single Market and injecting more confidence into the system.

Activities of professional accountants in public practice, business and government are diverse. They include preparation of financial information, tax services, statutory audit as well as many innovative services in the areas of non-financial reporting, assurance services other than statutory audit, sustainability and corporate social responsibility, strategy and management consultancy and corporate governance.

For the accountancy profession, there are a number of inherent barriers to cross-border mobility that are not related to recognition of professional qualifications. National law, in particular Member States’ tax and company law, is usually the basis for accountancy work. Despite a certain converging influence of EU legislation in those areas, it is still a major challenge to acquire the necessary knowledge of tax and company law of another Member State in order to be able to provide accountancy services cross-border. The situation might change in the long term with the adoption of international standards related to accounting, auditing and independence (IFRSs, ISAs, IESBA Code of Ethics), which is important to provide a level playing field across the profession, however, for the time being there are no significant cross-border activities of accountants and auditors.

Another barrier arises from the fact that there is a diversity of market access rules in the Member States, making it difficult to implement the mechanism of the Professional Qualifications Directive.

Furthermore, recognition of professional qualifications is only one part of the rules that influence cross-border activities: the Services Directive and – for statutory audit services – the Statutory Audit Directive and their inter-relationship with the Professional Qualifications Directive also have to be considered as illustrated in the FEE paper “INTERNAL MARKET FOR SERVICES AND THE ACCOUNTANCY PROFESSION: QUALIFICATIONS AND RECOGNITION” issued in November 2007.

FEE has for many years supported initiatives to increase mobility of professionals in the accountancy services sphere, including working with member bodies to explain the arrangements under EU legislation for mobility and to reduce barriers. FEE organised a round table with Member State authorities to assist in the interpretation and implementation of the provisions of recognition of professional qualifications.

Full response

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