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12 January 2011

3L3 Committees' Joint Letter on the European Commission’s Green Paper on Audit: Lessons learnt from the crisis


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3L3 Committees agree that a high level of audit quality is a key element in ensuring market confidence and contributing to investor protection. They believe that audit quality across the EU could be enhanced by further harmonisation in areas such as auditing standards.


3L3 Committees express the support for the European Commission’s project to analyse audit matters in the aftermath of the financial crisis. They note that the Green Paper covers a very broad range of issues, which are worth a thorough debate by stakeholders.

Furthermore, 3L3 Committees believe that improvements can and should be sought within the current role of the auditor. In this regard they agree with the Commission's efforts to consider whether there is a need to reinforce some of the current rules, as they believe that this will contribute to enhanced audit quality. However, the Committees note that it is difficult to discuss the auditor’s role in isolation and that any possible revisions to the auditor’s role should be analysed in the context of their interaction with management, audit committees and other players.

3L3 Committees acknowledge that there is a need for better communication between auditors, audit committees and external stakeholders. Improved communication, inside or outside the audit report, would be beneficial and might help diminish the expectations gap of stakeholders. 3L3 Committees are supportive of developments in the role of the audit committees and in their interactions with different stakeholders.






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