The financial crisis has highlighted weaknesses in the statutory audit process, especially for public-interest entities (PIE), such as banks, insurance companies and listed companies. Given that many banks suffered huge losses from 2007 to 2009, it is difficult to understand how auditors could have given clean audit reports to their clients. Against this background, the Commission proposed both an ambitious regulation and directive in the area of statutory financial auditing of companies. The proposals lay down conditions for carrying out such audits, rules on the organisation and selection of auditors, risks of conflicts of interest which impair the independence of auditors and rules on the (European) supervision of compliance by auditors with those requirements, as well as addressing the barriers to entry into the audit market.
However, the S&D Group intends to table amendments, stressing that we want more fundamental reform. The S&D Group, the Greens and GUE-NGL will vote against the report as this reform will not improve the reliability of audit reports and will not prevent the next crisis. Today's reporting is costly, but does not provide sufficient insight into the annual accounts of listed companies. We want independent auditors to provide independent reports.