KPMG supports a positive agenda for change and is convinced that the status quo is not an option. This means a clear acceptance that all stakeholders – including auditors – have lessons to learn.
KPMG welcomes and strongly supports proposals that aim to improve the relevance and quality of audit and provide for a robust framework for auditor independence and corporate governance.
However, in common with many others, KPMG believes that many of the European Commission’s proposals run the real risk of achieving precisely the opposite effect to that intended: of significantly harming audit quality rather than improving it.
The draft legislation includes proposals that would require some (but not all) networks to be ‘audit-only’ within the EU; ban virtually all non-audit services to audit clients; and require mandatory firm rotation after a maximum of six years. September 2012 saw the release of the draft Legal Affairs Committee (known as JURI) report with their revised set of proposals; which rejects the ‘audit only firm’ concept and supports a list of prohibited services in relation to non-audit services though retains the principle of mandatory firm rotation.
On these pages, you will find the details of the EC’s proposals, the latest Committee reports, KPMG’s viewpoints, and relevant research and study materials.