Brussels: EU plans to ban audit firms from offering consulting services have been delayed following ferocious lobbying by the Big Four professional services firms and an internecine struggle within the EU Commission over the content and timing of the proposals.
The EU Commission had scheduled this Wednesday, November 23rd, for publication of changes to audit regulations, following the European Union Green Paper on "Audit Policy: Lessons from the Crisis" issued last October. Its press office was advertising the date as late as last Thursday, but the conference to announce the plans has been scrapped.
The professional services community had braced itself for radical proposals from Michel Barnier, the European Union internal market commissioner.
Most controversially, a leaked draft of the new regulations implied that the Big Four would be forced to:
- abandon consultancy work,
- share audit work with smaller rivals,
- adopt mandatory rotation rules that impose time limits on working for big clients.
The delay is interpreted in Brussels as evidence of widespread concern among Barnier's fellow commissioners — and an eleventh hour attempt to find consensus on the new audit firm rules.
The stay of execution may only be short lived though. The Commission is expected to try to unveil its proposals again on November 30th, though a longer delay is possible if no agreement is reached.
theConsultant.eu discussed the implications of the Commission's draft proposals in October here.