• 30-APR-2013

  • London

PwC Response to the European Parliament's Legal Affairs Committee (JURI) vote on audit proposals

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Many of the changes proposed by the European Parliament's Legal Affairs committee are sensible and will improve the effectiveness of the draft legislation and enhance its impact on audit quality. However there are a number of measures, such as mandatory firm rotation, that we believe could be counterproductive to audit quality and need to be looked at further. Mandatory firm rotation, reduces choice and competition, increases costs for business and takes decision making away from audit committees and shareholders. Most importantly there is no evidence that Mandatory firm rotation will enhance audit quality, and in some instances there is a danger that it could harm it. Mandatory Firm Rotation will have a negative impact on European business, particularly listed small and medium size companies which should be the engine of Europe's growth. We are hopeful that this issue will be addressed as the audit proposal continues its way through the EU political process.