EU AUDIT RULES TO RESTORE CONFIDENCE IN INSURERS AND BANKS

The European Commission has proposed changes to audit rules for financial institutions, after shortcomings were exposed by the 2008 financial crisis. Audits of some large financial institutions just before, during and since the crisis resulted in 'clean' audit reports despite the serious intrinsic weaknesses in the financial health of the institutions concerned, the Commission said. The proposals are intended to clarify the role of the auditors and introduce stringent rules for the audit sector - in particular strengthening the independence of auditors and encouraging greater diversity in what is a highly-concentrated audit market. The Commission is also proposing a single market for audit services across Europe, once licensed in one Member State. The proposals are intended to restore confidence in audited financial statements, in particular those of banks, insurers and large listed companies.