Saturday, 5 April 2014

European Parliament votes to improve company audits

In a busy session last Thursday, which also saw votes on greenhouse gas emission trading, credit card fees and reduction of customs duties on Ukrainian goods among many other matters, the European Parliament voted for improvements in the auditing of public bodies. The aim is to introduce competition for the big four audit firms, to provide more useful information to the public and shareholders, and to sharpen the grey area where auditors also act as financial advisers to companies. There is a more authoritative summary here.

The voting patterns were interesting. The Liberal Group (which includes Liberal Democrats) voted for, as one might have expected for a measure which improves company governance and transparency. UKIP, with its close ties to the City of London, voted against or abstained. The socialist group including Wales' Derek Vaughan, for reasons which I have yet to ascertain, also voted against. However, British Conservatives voted with the majority, which bodes well for the next steps.

The final say is with the European Council. Given Conservative support in the Parliament, it seems unlikely that Cameron or Osborne will block the measure on the EC or resist introducing the enabling legislation in Westminster.

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