The European Commission proposal on specific requirements regarding statutory audit of public-interest entities, aimed at a higher quality, dynamic and open audit market, is on hold as European member states and the European Parliament failed to reach an agreement over other planned curbs on auditors. This proposal intends to force companies to switch accountants about every ten years with the aim of ensuring that taxpayers will not once again be the first in line to pay for bank failures. The European Commission draft law aims to make accountants challenge more what they are told by clients and is meant to boost competition in a sector dominated by big accounting firms such as PwC, Deloitte, KPMG and EY.
A final deal was expected when EU lawmakers and the European Parliament met in early December but disputes over issues such as banning accountancy firms from giving tax advice to companies whose books they were already auditing have postponed negotiations to early 2014. According to MEP Sajjad Karim, the British Conservative rapporteur, member states failed to come up with new compromises whilst the European Parliament made a considerable effort to find a way forward.
With the European Parliament elections in May, the draft law could be blocked if no deal is reached by March and April.