The Commission published a study undertaken by London Economics on the economic impact of current EU rules on auditors' liability regimes and on insurance conditions in Member States. The study finds that the international market for statutory audits companies is highly concentrated and dominated by the Big-4 networks. The failure of a network could lead to difficult consequences for the wider economy like a significant reduction in large company statutory audit capacity possibly creating serious problems for companies whose financial statements need to be audited. A limitation on auditor liability would reduce this risk.
The study also concludes that while there exist a number of variants of statutory audit liability limitation, the diversity of circumstances in terms of both audits and company size is such that it is unlikely that a one-size-fits-all EU-wide approach is the most useful.
The study analyses the structure of the auditing market and its possible development in the future, describes the existing limitations in the insurance market for international audits, examines the economic needs for limiting auditors' liability and compares several possible methods for limiting liability.
The Commission will issue a report based on this study before the end of 2006.
Press release
Final report
© European Commission
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