Patrick de Cambourg comments Mazars’ contribution to the EU consultation on audit policy launched by Michel Barnier, the European Commissioner for Internal Market and Services.
Patrick de Cambourg President and CEO of the Group
Q1 - The European Commission has published a Green Paper “Audit Policy: Lessons from the crisis”, with the ambition of revisiting the way audit works and how the audit market is structured in the EU. Is this necessary and timely?
“Mazars warmly welcomes the publication of the Green Paper and the launching of a wide-ranging public debate on the future role of the auditor and the future shape of the audit market in the European Union. We have answered the 38 questions in the Green Paper in a very detailed manner as we believe the construction of a Single Market for audit, less concentrated, more efficient, integrated and competitive, is essential to enhance financial stability in Europe and to serve the public interest. We believe that the European Union has a role to play in fostering the development and efficiency of a well balanced global audit market. This consultation is an opportunity for the European Union to assert itself as a robust and competitive part of this new global framework of the audit market.”
Q2 - What kind of pragmatic measures are you promoting in your contribution?
“In our detailed response, we suggest a number of practical regulatory measures forming a consistent and pragmatic “reform package” which includes the following:
registration and supervision of auditors at EU level;
transparent, regular and fair tendering;
prohibition of contractual clauses, and elimination of the bias, in favour of dominant players;
progressive and balanced joint audits;
rigorous and global monitoring of anti-competitive “up-stream” mergers and acquisitions by dominant players;
enhanced governance and transparency of audit firms;
better identification and assessment of risks by auditors;
more extensive communication on audit findings and appropriate liaison with supervisors;
additional assurance relating to narrative reporting.
On the basis of our commitment to the public interest, we believe this will increase transparency and confidence in capital markets, favour financial stability and healthy economic growth and help develop a fair, open and diversified audit market.”
Q3 - The EU Commission will hold a high-level conference on the 9th and 10th of February in Brussels regarding the question of financial information and audit, what are the key messages you wish to convey?
“This meeting will be the opportunity to make a first assessment on the responses to the Green Paper received by the European Commission and to pursue this crucial debate with the European authorities with regards to the next steps of this important project for Europe, to which Mazars intends to provide all of its support. We are committed to making a constructive contribution as we believe that the status quo is not the best option for the EU.
In our view, there are two ways to foster progress: by law or by best practices of market players themselves. Both are necessary and complementary. Best practices that are in line with the public interest, in particular with already tested positive impact, should naturally be enacted and generalised. At Mazars, we have made some important choices and thus provided our contribution. These are along the same lines as the propositions supported by the Commission:
A globally integrated organisation ; an integrated partnership of 700 partners at a worldwide level;
Transparency of financial performance and governance; since 2005, Mazars has published an Annual Report that presents its consolidated accounts to IFRS standard and jointly audited. To date, it is the only worldwide audit and advisory services group to submit itself to this demanding exercise under the same conditions as its listed clients.
An open and vibrant environment; Mazars does not intend to deploy a national or regional model at global level, but strives to integrate different cultures. We are in favour of a multipolar world and are particularly at ease in situations that require listening and dialogue.”
February 2011: As the European Commission hosts a very important conference on the future of auditing, following on from the publication of its Green Paper on ‘Audit Policy: Lessons from the Crisis’, our respective firms are committed to contributing positively to the calls for change in auditing and the audit market.
We have the firm belief, on the basis of our commitment to the public interest, that there is a call for more competition and diversity in the audit market as well as a need for more efficiency in audit processes and greater accountability from the auditors.