Transcript THE IMPACT OF THE EURO ON EUROPE’S CAPITAL AND …

Ordem dos Revisores Oficiais de Contas
The Auditor of the Future
The Harmonisation of the Profession in the EU
Estoril, 26 October 2006
Prof.Henri Olivier
FEE Secretary General
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FEE - European Federation of Accountants
 Representative organisation for the accountancy profession in
Western Europe
 44 Member organisations in 32 countries
 Including all 25 EU countries, 2 candidate countries and 3
EFTA members
 Representing a combined membership 500.000 individuals
 45 % in public practice
 55 % industry, commerce, government and education
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The mission of FEE in Society
(…)
To
work
towards
the
enhancement,
harmonisation and liberalisation of the
practice and regulation of accountancy,
statutory audit and financial reporting in Europe
in both the public and private sector, taking
account of developments at a worldwide level
and, where necessary, promoting and
defending specific European interests;
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Harmonisation of the Profession
 Why do we need a single market for
accountancy services in Europe?
Companies are operating on a European and
global market
Capital markets are no longer national
Risk of duplicating oversight measures
 Building a European single market for the
profession requires a minimum harmonisation
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Harmonisation of the Profession
 The absence of a common definition of the profession:
a barriers to harmonisation
Activities of professional accountants vary in EU
Member States
Except for audit and some assurance services
defined by EU Directives, most activities are
unregulated
Chances are small to find a common scope
of activities for accountants in Europe
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Harmonisation of the Profession
 What are the common characteristics of
a profession ?
Equivalent level of education (1)
Equivalent principles of ethics (2)
Equivalent standards of practice (3)
Equivalent quality of services (4)
Uniformity is not the goal, equivalence is necessary
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Equivalent Level of Education (1)
 A recognised level of competence is a feature of a
profession at national level
 At European level, free movement of professionals
raises the question of equivalence of the
qualifications of migrants. The issue is dealt with
in two EU Directives:
The Directive on statutory audit (17 May 2006)
The Directive on recognition of professional
qualifications ( 7 September 2005)
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Equivalent Level of Education (1)
 Statutory Audit is the core business of the
profession. The Directive defines conditions for
approval and registration of auditors which will be
the benchmark for other activities of accountants
 However competition authorities raised the
question: what is the appropriate level of education
for other activities?
 Education means competence and must be
maintained during the entire professional life
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Equivalent principles of ethics (2)
 The IFAC code of ethics offers a solid foundation
for professional ethics at a global level
 FEE supports the IFAC code and would not wish to
define different rules for Europe
 Some significant differences remain among the
European Member States
From a public interest perspective, these
differences relate to less important aspects
Relevance of competition regulations
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Equivalent standards of practice (3)
 The accountancy profession must be recognised
by the quality of its services rendered to clients
 For assurance services, including auditing, one of
the measures adopted to improve quality is to
develop professional standards.
 Except for consequences of local laws and
regulations, there is a general interest to refer to
global standards. Indeed we must be sure that
these standards take European Interests into
consideration
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Equivalent quality of services (4)
 Building the reputation of a profession requires
long efforts but can be quickly destroyed by the
fault of few people
 The profession has an interest in being sure that
all its members are continuously improving the
quality of services
 In auditing, the public interest justifies the system
of quality assurance under public oversight
 The future of the profession is in quality and
innovation
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Harmonisation of the Profession
 What can FEE do to promote harmonisation?
 (1) Education is the responsibility of Member
bodies; FEE works with the European
Commission at facilitating recognition of
professional qualifications between Member
States
 (2) FEE supports the application of the IFAC
Code of ethics in Europe; our Ethics working
party works actively to defend European
solutions on ethics at global level
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Harmonisation of the Profession
 What can FEE do to promote harmonisation?
 (3) Using common standards allows beter
understanding of financial reporting and assurance
services. FEE working parties work actively to
defend European interests in setting the standards
for financial reporting (IASB) and audit or assurance
services (IAASB) at global level
 (4) Quality assurance and oversight also becomes
a priority in the implementation of the Directive on
Statutory Audit. FEE keeps close contact with the
European Commission and EGAOB
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Harmonisation of the Profession
Conclusions
 The profession has an interest in promoting the
European single market for accountancy services
 We need to think more European and more global
because this with help delivering better services
 Harmonisation is not uniformity; there is still room
for dealing with local issues at national level
 Harmonisation in Europe must have quality of
services as ultimate objective
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Harmonisation of the Profession
FEE
Fédération des Experts Comptables Européens
Avenue d’Auderghem 22-28
B – 1040 BRUSSELS
Tel. + 32 (2) 285 40 85
Fax: + 32 (2) 231 11 12
Email: secretariat @ fee.be
Website: www.fee.be
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