Activities of Kurt LECHNER related to 2011/2037(INI)
Legal basis opinions (0)
Amendments (8)
Amendment 17 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Agrees with the Commission on the principle that an audit report's conclusions should focus on substance over form. As a consequence, conclusions need to be clear and concise and should address all issues being part of the legal mission of the auditor;
Amendment 44 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Agrees that there is an inevitable conflict inRecognises that in order to avoid conflict risk due to the auditor being appointed and paid by the audited entity; nevertheless,, the current EU Audit Directive lays down the principle that statutory auditors are appointed by the general assembly and that for public interest entities the audit committee recommends the statutory auditor; therefore 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 and calls on the Commission for appropriate proposals in that sense;
Amendment 48 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. BelievAgrees 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 for four years, renewable only once for a further period of four years, followed by a per the independence of the auditor is of paramount importance; believes that audit committees have an important oversight role in ensuring that the auditor remains independent and asks the Commission to provide guidance to assist audit committees in this respect; believes that the internal rotatiodn of at least four years – eight years for public interest entities – during which the audit firm concerned cannot audit the same company again; considers that there would be a need, at the end of the initial four-year period, for a new team to be appointed from within theudit partners as currently enshrined in the EU Audit Directive for public interest entities is an appropriate mechanism to ensure auditor independence. Scientific studies give evidence to increased cost for audited companies and a steep decrease of audit quality in the case of the rotation of the audit firm due to a loss of institutional knowledge about the audited entity. It can be expected that external rotation will also negatively impact the market position of smaller and medium sized audit firms;
Amendment 63 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Takes the view that there should be a ban on services other than auditing being provided to the audited company, as this would pose a risk to the auditor's independence; takes the view, furthermore, that under no circumstances should internal and external auditing services be provided simultaneously; points out that this would restrict ‘lowballAgrees that auditor independence should not be compromised by the provision of services other than auditing being provided to the audited company by the auditor; acknowledges that the principles generally applied internationally by audit firms in respect of public interest entities are considerably more restrictive than required by EU law; asks the Commission to bring forward proposals to require that these restrictions apply to public interest entities; recognizes that the provision of services other than auditing’, twhe 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 firmsre not incompatible with auditor independence, can be an essential element to provide high quality audits in a complex business environment via a broadened skill set. Sees in particular in the area of small and medium sized businesses an expectation that the statutory auditor is a partner for business who can also give advice on taxation and otheir clients, particularly where major audit firms are concerned; issues. Recognizes that audit's high quality standards, when applied to other services contribute to the trust in the financial transactions and financial markets;
Amendment 88 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. Believes that as service providers which rely on human assets (auditors) rather than financial assets, audit firms are not interconnected and an audit firm failure would not create any domino effect with the rest of the economy. Takes the view that firms that are deemed ‘too big to fail’ 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 91 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. Takes the view that the contingency plans are an important element to prevent an unorderly dissolution of a firm. Such 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 whein order to allow the regulators to play their 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 response plan 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 provide for the orderly transfer of clients and staff to other audit firms and handle these situations with due care;
Amendment 95 #
Motion for a resolution
Paragraph 20
Paragraph 20
20. Considers that there is a need to create, or encouragealls on the Commission to create a level playing field for competition in the audit market and to reduce complexity in the cregulation of, a voluntary code of ethics for the Big Four firms, encouraguditing from a European perspective. Easier market access and the removal of market entry barriers are key elements to have a greater number of players and notably of larger players ing them to restrict their own growth, thereby protecting the development of medium-sized audit firms, which would ultimately also be beneficial for the survival of the major firms themselve audit market. Considers that audit committees are best placed to select and monitor the effectiveness and quality of the audit to best meet the audited entity’s needs, and that it is inappropriate to artificially influence the audit market via regulatory interventions;
Amendment 106 #
Motion for a resolution
Paragraph 22
Paragraph 22
22. CallsRecognises the importance of the role onf the Commissiaudit committee in mon ito bring in a system of compulsory tendering on a periodic basis for public interest entities, under which at least one non-Big Four company would have to be included; takes the view that the audit committee must be given a key role in this process, in which shareholders must also take partthe effectiveness of the external auditor and the audit process; calls on the Commission to review audit committee practices with regard to tendering processes with a particular view on aspects of administrative burdens associated with a formal tendering process. Encourages the Commission to include the results of an annual discussion of the auditor selection in an audit committee report to the shareholder assembly;