Brussels, 19/11/2008 (Agence Europe) - The European Commission has launched a consultation exercise, to run until 28 February 2009, on possible ways to increase competition on the business audit market. In 2007, in terms of revenue from services such as auditing, insurance, and tax advice, the famous “Big 4” of Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers shared 80% of the total market. The Commission fears that the financial crisis could widen the gap between these four major international players and other audit companies.
On the basis of the study carried out by Oxera in 2007 (see EUROPE 9529), the Commission asks two questions. In order to encourage investment from other financial players, should the rules contained in directive 2006/43/EC, which requires that auditors hold a majority of the voting rights in an audit firm and that a majority of auditors control the management board, be relaxed. Do other factors, such as the quality and expertise of staff; low switching rates (reasons for companies not to change their auditor); differences among firms in their international outreach; and differences in independence rules have an effect on the level of competition in the audit market? In June, the Commission adopted a resolution encouraging member states to limit the liability of auditors of listed companies (see EUROPE 9678). (M.B./transl.rt)