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Commissioner McCreevy welcomed the political agreement on the Directive at first reading. ”This is a crucial Directive, which will bring EU financial reporting into the 21st century by introducing a much more rigorous and ethical audit process for company accounts. Importantly, it will also require the application of international auditing standards and establish criteria for public supervision”, McCreevy said:
The Directive aims at reinforcing and harmonising the statutory audit function throughout the EU. It sets out principles for public supervision in all Member States. It also introduces a requirement for external quality assurance and clarifies the duties of statutory auditors.
The Directive further improves the independence of auditors by requiring listed companies to set up an audit committee with clear functions to perform. It also foresees the use of international standards on auditing for all statutory audits conducted in the EU. Under the new rules, European auditors and audit firms will be required to prove their independence from the management of the audited company. The law also requires the application of the International Standards for Auditing (ISA) in European auditing.
Council press release
Commission press release