CESR survey on oversight of auditors

30 November 2006

CESR publishes today a survey of the role of its Members in the oversight of auditors. The picture that emerges from this survey is one where only a few securities regulators have a direct role in supervising auditors, but a larger number of securities regulators play an indirect role in the supervision of auditors e.g. through membership of the auditor oversight bodies. Certain combined regulators within the European Union have specific powers with respect to auditors, but these powers arise from their role as banking supervisors, not as securities regulators. Therefore these specific powers are not covered extensively in this survey.

The majority of securities regulators have a wide range of powers to request information from auditors in respect of company prospectuses, but their powers are limited in other respects in relation to auditors.

With the enactment of the 8th Directive on Statutory Audit, which will be implemented in member states by mid-2008, each member state has to establish an auditor oversight body. Some member states are still in the process of establishing these auditor oversight bodies, so the situation as set out in this report is likely to change over the next two years. Indeed the situation in members’ states was changing as this report was drafted.

With the complete implementation of the Transparency and Prospectus Directives, the information in the survey on the powers of the securities regulator to question the auditors with respect to the issuance of prospectuses will also change.

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