EU audit legislation will have a significant impact on businesses and the way they interact with their professional services providers. KPMG has always believed that any reform to the statutory audit market should have a clear and unequivocal benefit to audit quality, actively support a robust framework for auditor independence and strengthen corporate governance. Read this brief report for KPMG’s view on specific measures in the legislation.
KPMG has consistently supported the elements of EU Audit Reform that are consistent with the aim of enhancing audit quality, strengthening corporate governance and promoting greater transparency for all stakeholders. We believe the adoption of International Standards on Auditing, expanded auditor reporting requirements and strengthening of the role of independent audit committees will positively contribute towards audit quality; in this regard we are supportive of the changes.
We continue to believe, however, that other aspects of the legislation, such as mandatory firm rotation combined with significant restrictions on non-audit services, will inevitably reduce choice for shareholders, while increasing costs and complexity.
It now falls to each of the National Governments of the 28 EU Member States to implement the new legislation, adopting the country interpretations they consider to be most appropriate. KPMG is fully committed to working in the public interest with regulators, governments and the business community to ensure that the new legislation is implemented as effectively as possible across all EU Member States.
For KPMG’s full views on specific measures within the legislation, please see the KPMG View document.