Ethics and governance in the European Financial centers

19/01/2007


The British Bankers' Association (BBA) said today that it has serious concerns over the 8 th Directive on Statutory Audit. As it is currently worded, the Directive will have an adverse impact on third country companies trading on the UK market by potentially requiring them to be audited by an auditor registered in the UK.

The BBA has already raised these concerns with the European Commission in November 2006. The Commission has now launched a consultation on applying transitional measures until equivalence of third country oversight into auditing is established.

The BBA considers that this Directive should promote confidence in auditing and enhance investor protection without damaging the attractiveness of EU capital markets. However, in order to do so, companies from third countries must have a transition period for their home country auditing to be considered equivalent to EU standards.

Angela Knight, chief executive designate of the BBA said: "The BBA is fully aware of the impact of this issue, which is why we wrote to the European Commission in November setting out our concerns. We are pleased to see that the Commission has launched a consultation on this and we are urging the Commission to address the potentially adverse consequences implicit in the Directive.

We would also strongly recommend that the business community and the Government support the Commission's initiative."

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