Will the Audit Market Benefit from the Proposed Reforms or Not?
13.12.2011Company: Amcham
RSM TACOMA, a leading consulting company, has been following proposals on the reform of auditing in the EU. The proposals pose a number of questions. What might be their impact on the market? Less dependence of audited companies on the so called Big Four, greater transparency, closer integration within the EU and the creation of a single market for statutory audits and mandatory rotation are all possible impacts.
Monika Marečková, Managing Partner RSM TACOMA, comments on the issue: “Unfortunately, we do not expect the proposed changes to enhance the quality of auditing or increase transparency in the market. We suspect that the original positive aim of the EU to improve competition in the audit market and quality of services will be overshadowed by some of these proposals, for example audit-only companies may only be allowed to provide additional services, other than audit services, for only up to 10% of the fee they receive from the client. This is bad news for audit firms. Mandatory rotation of audit firms is another issue. While we agree with it in principle, we are also concerned that rotation every six years is overly aggressive.”
Commenting on the proposals, Jean Stephens, CEO of RSM International said: “We believe a whole package of measures is essential. Our focus must remain on providing a framework for the highest standards of audit quality to benefit investors and other key stakeholders.”
RSM International welcomes an open and democratic debate and will continue to be active in this process and conduct a careful analysis of the proposals and their collective impact on the audit market, taking account of the needs of investors, public interest and the profession.
About RSM TACOMA
RSM TACOMA is a leading Czech advisory firm providing services in respect of mergers & acquisitions, corporate finance, valuation, tax, trust services, audit, management consulting, accounting, and payroll. RSM TACOMA has been active in the Czech market since 1993, and in 2011 joined RSM International, the sixth largest global independent consulting network. For more information, visit our website at www.rsm-tacoma.cz.
About RSM International
RSM International is the sixth largest independent consulting network in the world. It has 92 members in 83 countries, 714 branches around the world and 32,551 employees, including 3,113 Partners. For more information on RSM international, visit www.rsmi.com
