Auditor Independence at the Crossroads – Regulation and Incentives

Doralt, Walter; Fleckner, Andreas Martin; Hopt, Klaus J.; Kumpan, Christoph; Steffek, Felix; Zimmermann, Reinhard; Hellgardt, Alexander; Augenhofer, Susanne

Auditor Independence at the Crossroads – Regulation and Incentives

European Business Organization Law Review (EBOR), Vol. 13, No. 1, pp. 89-101, March 2012, DOI: 10.1017/S1566752912000043

Max Planck Private Law Research Paper No. 12/1

14 Pages Posted: 14 Jan 2012 Last revised: 9 May 2015

See all articles by Walter Doralt

Andreas Martin Fleckner

Humboldt University of Berlin - Faculty of Law; Max Planck Institute for Comparative and International Private Law

Klaus J. Hopt

Max Planck Institute for Comparative and International Private Law; European Corporate Governance Institute (ECGI)

Felix Steffek

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)

Reinhard Zimmermann

Max Planck Institute for Comparative and International Private Law

Alexander Hellgardt

University of Augsburg - Faculty of Law; Max Planck Institute for Tax Law and Public Finance

Susanne Augenhofer

University of Innsbruck

There are 2 versions of this paper

Abstract

Trust in the independence of auditors is essential for the functioning of markets. If auditors are not independent or not believed to be independent, transaction costs will rise. In November 2011, the European Commission proposed radical reforms for statutory audits in Europe, fueling heated political and academic debates. We welcome the Commission’s initiative and present cornerstones of a new regulatory framework. With these and related measures, trust in the independence of auditors will be restored and strengthened.

Note: This article is published in this Research Paper Series with the permission of the rights owner, T.M.C. Asser Press.

Keywords: audit, independence, rotation, Big Four, market concentration, internationalization, legal harmonization, standardization

JEL Classification: D43, G15, G18, G38, K22, M42, M48

Suggested Citation: Suggested Citation

Doralt, Walter and Fleckner, Andreas Martin and Hopt, Klaus J. and Kumpan, Christoph and Steffek, Felix and Zimmermann, Reinhard and Hellgardt, Alexander and Hellgardt, Alexander and Augenhofer, Susanne, Auditor Independence at the Crossroads – Regulation and Incentives. European Business Organization Law Review (EBOR), Vol. 13, No. 1, pp. 89-101, March 2012, DOI: 10.1017/S1566752912000043, Max Planck Private Law Research Paper No. 12/1, Available at SSRN: https://ssrn.com/abstract=1983204