UK Commission confirm Saj's proposed Audit Reforms on the right track

As the European Parliament's Rapporteur with responsibility for drafting new legislation on Audit reform,  Sajjad put forward proposals in April, based on ensuring transparency, but not so frequently as to restrict a company’s competitiveness.

His involvement in these on-going  EU Audit reforms has been acknowledged in a article covering the UK's Competition Commission's proposals for a more level paying field in the audit and financial markets.

Commenting on the Commission's report Sajjad said:

“The findings from the UK's Competition Commission confirm that a package of measures are required to resolve concerns about standards in markets for audit services. I have long called for any concerns for standards to be addressed by relevant national competition authorities, and am satisfied by those provisional remedies identified in the UK.

The UK commission findings chime with my proposals adopted at the European level, which recognise that any reforms need to be carefully weighed and should not have an adverse effect on the market. I have above all emphasised the importance of the audit committee when devising the European reforms, something which the Competition Commission has also taken on board.

Forcing companies to rotate after a short period of time is detrimental to audited companies and auditors alike; it flies in the face of our goal of restoring trust in the financial system and ensuring the highest quality audit services are available for shareholders and investors.

Auditors require a sufficient length of time to ensure the audit process is carried out judiciously, but we must also recognise that some tenures may be perceived as too long. This fine line is something we need to get right. We need auditors and companies to be able to focus on the audit, and shareholders and investors to have confidence in this process.

Our work at European level continues with the hope that a conclusion can be reached by the end of the year. I am confident that European lawmakers can resolve their present differing opinions, and the reforms agreed will be of great benefit to financial reporting and corporate governance across Europe."

 

You can read the full article published in Corporate Governance Report here: http://www.corporategovernancereport.com/auditing-policies/uks-frc-rejects-calls-for-compulsory-audit-rotation/