The Süddeutsche Zeitung discusses the proposals of Policy Fellow Sebastian Mack for the upcoming EU audit market reform.
With the Commission working on new legislation for the European audit sector, now is the ideal time to discuss the pros and cons of possible reform options. Against the backdrop of Big Four accounting firm EY preparing its own break-up into separate audit and advisory businesses, Sebastian Mack proposes a complete ban on the provision of advisory services to audit clients. Splitting into separate companies, Mack argues, will not be enough to solve the problem of partiality: "If the shareholders of the separate companies remain the same, in practice they are still one and the same company with a common business interest." To improve competition and public oversight in the EU audit market, Mack also suggests that "joint audits involving at least one non-Big Four firm should become mandatory" and that "ESMA should directly supervise the largest audit firms."
Read the full article (in German) here.
Read the corresponding policy paper (in English) here.