Auditor Independence at the Crossroads – Regulation and Incentives
14 Pages Posted: 14 Jan 2012 Last revised: 3 Jun 2015
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