Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-09-26-Speech-1-118"
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"en.20050926.15.1-118"2
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"Mr President, a series of recent scandals has dented the confidence of consumers and investors. I could mention events concerning Enron or Parmalat, for example. The magnitude of these scandals was alarming, and they involved various kinds of fraud. The European Commission’s initiative constitutes a welcome response to the situation.
The Commission’s draft on statutory audits is the result of many years of preparation and incorporates recommendations made in 2000 and 2002. This directive is to replace the 1984 eighth directive concerning statutory auditors, which only contains the principles of accreditation of auditors, but does not refer to the audit procedure, supervision or external quality control. The new draft directive defines the duties of statutory auditors clearly and lays down certain ethical principles. The aim is to ensure the professionalism and independence of statutory auditors, which implies their honesty, professional competence, trustworthiness, professional secrecy and overall responsibility.
The Commission’s proposal on the principle of rotation of firms and partners is yet another contentious issue to be added to the list of those that have given rise to strong opinions. In general, the principle of rotation deserves support, as it ensures independence and encourages an objective assessment. The negative aspects of rotation are additional costs, loss of know–how, and the consequent risk of errors. Audit firms should be changed at least every seven years, and the break between contracts should last at least two years. Every effort should be made to ensure healthy competition, reduce the risk of fraud and provide high quality services.
The procedures presented in the report seem to represent a balanced and sensible response to the need to guarantee both the quality of audits and the independence of auditors.
In conclusion, I should like to emphasise that we should be aiming to restore confidence to the market, and also to strengthen shareholders’ rights, so as to make investments safer and European businesses more competitive."@en1
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