EUROPEAN COMMISSION PROPOSES DIRECTIVE TO COMBAT FRAUD AND MALPRACTICE

AUDIT OF COMPANY ACCOUNTS: EUROPEAN COMMISSION PROPOSES DIRECTIVE TO COMBAT FRAUD AND MALPRACTICE

de Beer, Linda

The European Commission has proposed a new directive on statutory audits in the European Union which will be considered for adoption by the European Union’s Council of Ministers and the European Parliament. In an attempt to increase investor confidence in audited financial statements as well as provide protection against corporate and audit failures, the directive proposes that:

* duties and ethical requirements for statutory auditors are clarified;

* external quality assurance is performed;

* robust public oversight is ensured; and

* co – operation between regulatory authorities in the European Union and with third country regulators is improved.

The full text of the proposed Directive is available at http://europa.eu.int/comm/ internal_market/en/company/audit/index.htm

Copyright South African Institute of Chartered Accountants Jun 2004

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