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Rewolucja: najwięksi audytorzy mogą się podzielić i zmienić nazwy – Onet Biznes.

Machine translation of that article:

According to new EU rules on which work is currently underway, the world’s four largest audit firms will be divided, and their names will change. The aim is to eliminate the risk of conflict of interest and shortcomings, which highlighted the recent financial crisis.

Investor confidence has been severely undermined the audit by the crisis, and I think the industry needs a change – said on Wednesday the Internal Market Commissioner Michel Barnier.

Policymakers can not understand why the auditors accept without reservation the condition of many banks, and shortly later, shortly after the outbreak of financial crisis, they need help from the taxpayers.

Barnier believes that the recent and obvious errors in the case of auditors, banks and Lehman Brothers AngloIrish and companies BAE Systems and Olympus’ show that audits do not take place in a proper manner. “

In his opinion, more oversight is needed and “more diversity in a very concentrated market, especially among the largest companies.”

Book of the largest companies in the world are generally checked by one of four companies: Ernst & Young, Deloitte, KPMG and PwC. In the eyes of the commissioner that situation is “in its essence oligopoly.”

According to the plan developed by Barnier large audit firms, in practice, the four largest, will have to separate from the rest of the audit activity, including tax consulting and other advisory services. This will help “avoid any risk of conflict of interest”.

Rebranding

Claire Bury, one of the closest współpracowniczek Barnier, said that if plans are approved by the Member States and the European Parliament, it will have an impact on the current business model of the Big Four.

In large audit firms, meaning companies with network revenues revenues in excess of the EU € 1.5 billion, operations in the area of ​​auditing and beyond would be moved to a separate legal entity.

“They will have to change names and I suppose it is the issue of branding that will be the biggest bone of contention” Bury said during a press briefing.

The project also envisages the imposition of all listed companies the obligation to the organization of public tenders for audit services, and perhaps also the introduction of a two-stage audit.

European Commission officials are aware that new legislation would reform the entire market at a structural level and their implementation would require time. They expressed hope that the incarnation of the new rules into force would take about 3-5 years.

“This is not something that can be in a hurry” a spokeswoman said to Barnier.

The last word on the fate of the project will include Barnier to the Member States and the European Parliament. In this process, certainly there are many doubts, elbowing and all kinds of changes.

ROTATION

Under pressure from the other Commissioners Barnier, resigned at the last minute of a key element in their plans – the introduction in the case of listed companies ‘joint audits’, which would improve their quality and to help smaller auditors gain experience in controlling the books of large companies.

Instead, however, the Commissioner would like to encourage companies to conduct “joint audits” by the need to change or rotation of auditors.

The auditor would have the right to audit the same company for up to 8 years in a row, but in the case of joint audits wydłużałby period to 12 years.

Audit firm could not provide audited company unrelated to audit services, including consulting in other areas, including taxes.

The EU plan also prohibits the practice in which banks make loans to companies, provided that they were audited by one of the Big Four firms.

Representatives of the big audit firms have warned that audits may increase costs and decrease their quality. But much more favorably on a plan of their smaller rivals look, which would gain completely new opportunities for development.

Auditing industry is interested in the longer British Competition Authority, and the possibility of rotating the audit oversight is being mooted also in the United States.

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