22 Amendments of Syed KAMALL related to 2011/2037(INI)
Amendment 7 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Takes the view that the debate on the role of the auditor should take place alongside a review of the role of the audit committee – now largely ineffective – and of the financial and risk reporting that companies are required to carry out;
Amendment 16 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Takes the view that statutory auditing of public interest companies/bodies has a social function and is in the public interest, as it is an absolutely fundamenta useful component of the democratic economic and political system;
Amendment 21 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Calls on the Commission to look into how the role of the auditor might be extended to include audo increase the qualitsy of risk reports providduced by the entity being audited, in addition to verification of the information supplied in the main financial statements;
Amendment 26 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Takes the view that auditors should be subject to an obligation to Code of Practice whereby they alert supervisors or the relevant authorities when they spot problems that might jeopardise the future of the entity being audited;
Amendment 30 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Takes the view that audit reports should be brief, with clear, concise conclusions, and that ithey should include an annexbe for the audit committee report to containing additional explaninformations on general issues such as the methodology used, and specific issues such as key indicators, materiality figures, assessments of the risk involved in the material accounting estimates or materiality judgements made, and any particular problems encountered whilst carrying out the audit;
Amendment 35 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Believes that fluent, regular dialogue between the external auditor, the internal auditor and the audit committee is vital to allow effective auditing, as the shareholders need to be kept informed, for example as to why an auditor is appointed, reappointed or withdrawn, or by means of specific clarifications relating to the audit committee report;
Amendment 37 #
Motion for a resolution
Paragraph 10 a (new)
Paragraph 10 a (new)
10 a. Takes the view that auditors should have the right to be heard at general meetings of the company in matters that relate to their role as auditors;
Amendment 46 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Agrees that there is an inevitable conflict in the auditor being appointed and paid by the audited entity; nevertheless, does not currently see any justification for this appointment to be made by a third party; with this in mind, calls for the audit committee's role to be strengthened;
Amendment 52 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Believes that, in order to guarantee the independence of audits, auditing contracts should run for no longer than eight years; takes the view that an initial contract should be concluded forthere is no need for firm rotation, as there is no evidence that lack of independence is an issue in audits. Existing partner rotation arrangements provide the independence necessary four years, renewable only once for a further period of four years, followed by a period of at least four years – eight years for public interest entities – during which the audit firm concerned cannot audit the same company again; considersthe audit to be effective. Evidence suggests that any compulsory audit rotation would be likely only to increase the concentration in the audit market, and there is good evidence that thereis would be a need, at the end of the initial four-year period, for a new team to be appointed from within the audit firmimpose significant costs on business, which should be avoided;
Amendment 55 #
Motion for a resolution
Paragraph 12 a (new)
Paragraph 12 a (new)
12 a. Takes the view that companies should conduct a compulsory open tendering process for statutory appointments of external auditors every eight years, on a renewable basis; notes that for Systemically Important Financial Institutions (SIFIs), this should be reduced to every four years;
Amendment 59 #
Motion for a resolution
Paragraph 13
Paragraph 13
Amendment 66 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Takes the view that there should be ano ban on services other than auditing being provided to the audited company, as ethis would pose a risk to the auditor's independence; takes the view, furthermore, that under no circumstances should internal and external cal guidelines at Member State level already forbid certain non-auditing services be provided simultaneously; points out that this would restrict ‘lowballing’, the practice of offering cut- price auditing with a view to obtaining compensation by charging for additional services; therefore takes the view that the ban must apply to all firms and their clients, particularly where major audit firms are concernedy the auditor, particularly of listed companies, and subject permitted non-audit services to significant disclosure and transparency. However internal and external auditing services should not be provided simultaneously;
Amendment 71 #
Motion for a resolution
Paragraph 14 a (new)
Paragraph 14 a (new)
14 a. Takes the view that areas of audit services which are deemed to incur a conflict of interest should be carried out by different companies, including evaluations of complex structured products;
Amendment 78 #
Motion for a resolution
Paragraph 16 a (new)
Paragraph 16 a (new)
16 a. Calls on the Commission to explore the likely demand for a relaxation of ownership rules on audit firms that would allow audit firms to raise capital from external sources; this would allow firms to recapitalise in the event of audit firm collapse and allow firms to grow their practices to enable them to enter the audit market for the largest companies;
Amendment 90 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. Takes the view that firms that arno audit firm should be deemed ‘too big to fail’ as to do so could create the risk of moral hazard and that the contingency plans relating to the major auditing firms should be reinforced; believes, furthermore, that these plans should be designed to minimise the risk of an audit firm leaving the market without good reason and reduce the uncertainty and disruption that would cause, whilst ensuring that the market does not end up being dominated by an even tighter oligopoly;
Amendment 92 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. Takes the view that the contingency plans ought to include a mechanism via which the regulator is informed of any problems threatening an audit firm nationally or internationally, these plans being designed to stabilise audit firms and prevent a sudden collapse resulting from an exodus of clients and staff whilst an investigation is ongoing; takes the view that there should be an objective study of the causes of the problem, irrespective of the penalties imposed, establishing whether the problems are intrinsic to the audit firm concerned or whether the firm can be rescued either in part or entirely; takes the view that there should also be a and that all audit firms should put in place response plans in which the regulator establishes whether, and under which conditions, the audit firm should continue to receive aid; takes the view that, where necessary, the plan should providecluding provisions for the orderly transfer of clients and staff to other audit firms where feasible;
Amendment 94 #
Motion for a resolution
Paragraph 20
Paragraph 20
Amendment 102 #
Motion for a resolution
Paragraph 21
Paragraph 21
21. States that it is vital to introduce a ban on restrictive clauses in contracts that favour the Big Four firms; calls for mergers between small and medium-sized audit firms to be encouraged; urges the Commission to look into creating a quality certificate and register for audit companies so that small and medium- sized audit firms can show that their work is of a satisfactory standard;
Amendment 109 #
Motion for a resolution
Paragraph 22
Paragraph 22
22. Calls on the Commission to bring inpropose that Member States put in place a system of compulsory tendering on a periodic basis forwhen public interest entities put their audits out to tender, under which at least one non-Big Four company would have to be inclube invited to tendedr; takes the view that the audit committee must be given a key role in this process, in which shareholders must also take part;
Amendment 117 #
Motion for a resolution
Title 5 a (new) after paragraph 23
Title 5 a (new) after paragraph 23
SMEs
Amendment 118 #
Motion for a resolution
Paragraph 23 a (new)
Paragraph 23 a (new)
23a. Since there are no systemic risks to reducing mandatory audit requirements for unlisted companies, calls on the Commission to make audits for most unlisted medium sized companies voluntary. This would be a major reduction of burden for the companies that are the engine for growth of the European economy;
Amendment 120 #
Motion for a resolution
Paragraph 24
Paragraph 24
24. Calls on the Commission to step up its efforts to increase convergenceMember States to encourage cooperation between national audit supervisors by the formation of Colleges of national supervisors;