On 21 November 2022, ecoDa and Mazars co-organised a timely and open webinar on ways to improve the corporate reporting ecosystem in the context of the European Commission’s initiative, in the presence of DG FISMA, board members, investors and auditors.
At a time of rising uncertainty, the interplay between board members, investors and auditors has never been so critical to the quality of corporate reporting. High-quality corporate reporting builds trust, which ensures the financial markets function effectively. Recent major corporate failures, such as Wirecard, and corporate concerns over the lack of choice in the PIE audit market have heightened the need for an EU initiative to enhance the corporate reporting framework.
According to the Consultation launched by the Commission in 2021, 65% of respondents expressed clear support for such an initiative, with 82% of those respondents expressing a need for improvement of some or all of the three pillars (corporate governance, statutory audit and supervision of PIE auditors). Only 13% answered there is enough choice in finding an auditor at an appropriate cost. (For further details, please see the Consultation outcomes – Summary report.)
Meet and listen to our guest speakers who addressed the corporate reporting challenges from different and complementary perspectives by watching the replay of the webinar:
Introduction by Ward Mohlmann, DG FISMA, EC
Moderator: Catherine Bradley, Senior Independent Director
- Olivier Boutellis, CEO, Accountancy Europe
- Jella Benner-Heinacher, DSW/Better Finance chair
- Karin Sonnenmoser, NED
- David Herbinet, Global Head of Audit, Mazars
Key takeaways include:
- (Ward Mohlmann) DG FISMA confirmed it is considering options for the way forward: an announcement by the European Commission of the next steps in its initiative on corporate reporting can be expected at the beginning of December, after the publication of the CEPS/Milieu study.
- (Jella Benner-Heinacher) Better Finance expressed investors’ concerns regarding the persistent concentration in the PIE audit market that limits companies’ choice of auditors, which is detrimental to audit quality and corporate reporting as a whole.
- (Karin Sonnenmoser) The ECODA board member pointed out the need for further harmonization in the implementation of EU audit rules in the Member States and for further guidance on sustainability reporting.
- (Olivier Boutellis) Accountancy Europe underlined the need for a systemic and balanced approach to all three pillars and the fact that increasing sanctions and supervision might deter non-dominant audit firms from entering the PIE audit market – and hence have an unexpected impact on concentration
- (David Herbinet) Mazars highlighted the current structural deficiencies of the PIE audit market where there is an emerging and growing number of audit orphans ‒ companies that cannot find an auditor. It takes time to change the structure of the market, but having a sufficient number of players in the PIE audit market is a prerequisite to properly implementing good regulation. Audit quality and audit choice are strongly connected.