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Mutual recognition of audit oversight

  • European Union (old) Image

24 Feb 2009

Charlie McCreevy, the EU Commissioner for the Internal Market and Services, has issued a Statement expressing concern that the United States has not yet agreed to a system of mutual recognition of national oversight of the auditing profession.

An excerpt:

The EU's aim has always been to move towards full reliance on the audit inspections of the public oversight bodies in these third countries. In practice, this would mean that audit firms from these countries would no longer have to be inspected by European public oversight bodies, as we in the EU could rely on the audit inspections that were carried out by their counterparts in these countries. In return, of course, EU oversight bodies would expect the same treatment for EU audit firms. Putting in place this model of cooperation would go a long way towards restoring the confidence of investors. But of course, it has to be based upon mutual trust.

Whilst some of our trading partners, notably Canada and Japan, seem to be open towards such an agenda, the same is not true for the United States. As things stand at the moment, the EU will commit itself to facilitate United States' inspections but we currently have no guarantee that the United States will do the same for us. This is not good for the confidence of our investors here in the EU. Nor does it send the right signal for the EU's own oversight bodies which we here in the EU have worked hard to put in place.

Click to view Audit Working papers — Statement Charlie McCreevy Commissioner for the Internal Market and Services (PDF 17k).

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