Brussels, 19/12/2000 (Agence Europe) - The European Commission has just published a consultation document on the independence of the statutory auditors for companies in the European Union, in preparation of a recommendation to the Member States that it will publish in mid-2002. This document follows on from a first recommendation, recently published, to improve the quality check of statutory auditing and answers the concern of the European executive to improve the quality and the comparability of financial information provided by companies (see EUROPE of 23 November, p.14). Thus it is part of the framework of the actin plan for financial services, whose aim is to complete by 2005 the building of an integrated market for financial services and capital.
"The statutory auditors' independence is fundamental to the reliability of audit reports, adds credibility to published financial information, and is necessary to the proper functioning of the European capital markets", explains the Commission spokesperson: "however, for the moment, there does not exist at the European level harmonised mechanisms offering guarantees of independence sufficiently high and
uniform". The European accounting legislation (fourth Directive in annual accounts (78/660/EEC) and seventh Directive concerning consolidated accounts (83/349/EEC)) foresee that the annual accounts and the consolidated accounts of some companies - in total, around three million capital companies in the European Union - must be checked by a qualified professional in order to guarantee that they provide a "faithful image" of the company's position and are in accordance with the provisions governing the presentation of financial information. The eighth Directive on company law (84/253/EEC) sets minimum deadlines concerning professional qualifications, the personal integrity and independence of the persons responsible for the auditing of accounts. "However, it does not contain any specific guidance on many questions, which surround the audit function, in particular, it does not provide a definition of independence", explained the European Commission: "audit regimes and independence rules can therefore differ significantly between Member States making it difficult for investors and other users to make meaningful comparisons of financial statements audited in different Member States".
In its consultation document, the Commission presents the main principals that would enable, in its opinion, to enhance the reliability and transparency of company accounts. It invites the interested parties to present their observations next March (the Commission document can be consulted on the Europa web site at the following address: http: //europa.eu.int/comm/internal_market).