Kreston International supports overhaul of audit policy in Europe


Wednesday, December 15th, 2010

Kreston International supports overhaul of audit policy in Europe

In its official response to the European Commission Green Paper Audit Policy: Lessons from the Crisis, Kreston International welcomed the wide-ranging consideration of the audit market but urged caution to make sure that actions can be successfully implemented without placing unnecessary burdens on the critical SME market.

Sue Almond, Kreston’s Director of Quality and Professional Standards explains ‘Many of the potential reforms are primarily directed to the listed company market, and it is clear that better information could be provided to investors in these companies, whether by the company or by auditors. There is a clear and valid concern about the extent of concentration in the audit market. We support moves that will benefit all businesses, such as the removal of restrictive covenants in loan agreements that limit auditor selection, but we are concerned that other moves, such as those that could limit the services that audit firms can supply, would have a disproportionate impact on SMEs for negligible public interest benefit.’

The Commission will announce the results of the consultation in early 2011 and will then identify priority actions. Kreston International and its member firms will be actively involved in championing positive and proportionate change in the audit market.

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