In March the European Commission plans to put forward specific proposals to improve auditing and corporate governance. While it may look like the Commission is reacting quickly after the Parmalat scandal, it actually began work last May, in response to US corporate scandals and the EU’s single market, which has increased cross border corporate activity.
The Commission is expected to propose that: a group auditor is fully responsible for auditing group-consolidated accounts; companies must rotate their main audit partner every five years or rotate their entire auditing firm every seven years; an independent audit committee must be used for all listed companies; and, all directors collectively must be responsible for company accounts.
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