Brussels, 18/06/2007 (Agence Europe) - On Monday 18 June, the Commission published a summary of 85 replies to the public consultation exercise on the possible reform of auditors' liability regimes in the EU (see EUROPE 9347). The majority of respondents from member states where limitation exists support a European initiative on this issue, whereas the majority of the respondents from countries without limitation reject any such initiative. The audit profession considers that there is a need for a Commission initiative on auditors' liability, while investors, banks and business do not believe so.
There is no agreement among respondents on the need to reform auditors' liability regimes in order to protect them against catastrophic losses and/or to improve the quality of the audit. The majority, nonetheless, acknowledge the need to tackle obstacles preventing entry to the statutory auditing market, and the lack of choice caused by the limited number of audit firms, which some even felt put the effectiveness of financial market at risk.
The Commission had suggested four possible reform options: - putting in place a financial ceiling at European level; - putting in place a ceiling based on the size of the company being audited, calculated on its market value; - putting in place a ceiling calculated on the basis of fees charged by the auditor to the client; - member states' putting in place the principle of proportionate liability. The consultation exercise did not bring clear support for any one option, although the sector would prefer to see some form of capping. European Internal Market Commissioner Charlie McCreevy has said several times that he is in favour of limiting auditors' liability. (mb)