Public Oversight Systems for Statutory Auditors in the European Union

52 Pages Posted: 23 Aug 2014 Last revised: 2 Jun 2017

See all articles by Beatriz Garcia Osma

Beatriz Garcia Osma

Universidad Carlos III de Madrid - Department of Business Administration

Ana Gisbert

Universidad Autónoma de Madrid

Elena de las Heras

Universidad Autónoma de Madrid

Date Written: August 22, 2014

Abstract

We provide a comparative overview of the process of implementation, harmonization and stabilization of public oversight systems for statutory auditors across the European Union (EU) after Directive 2006/43/EC. We build on institutional change theory to identify potential determinants as to why some countries still lag in this harmonization process. Oversight systems are a key institutional factor to guarantee the quality of financial information, essential to maintain investors’ confidence and deep and stable capital markets. Thus, the harmonization of these systems has long been an objective of the EU. Our analyses serve to identify, analyse and compare how EU countries have incorporated European-wide requirements into their national legal systems. Particularly, we study: (1) basic characteristics of the system and bodies for public oversight, (2) organizational structure, (3) financing (4) transparency, (5) supervisory, and (6) disciplinary mechanisms. We show that significant diversity still exists across systems and that both the incentives for institutional change and the distance between pre-existing systems and the Directive are important explanatory factors of the achieved level of harmonization.

Keywords: Auditing, Directive 2006/43/EU, Institutional differences, Oversight systems, Disciplinary systems, Harmonization, Accounting.

JEL Classification: G30, G38, K22, M40, M48

Suggested Citation

Garcia Osma, Beatriz and Gisbert, Ana and de las Heras, Elena, Public Oversight Systems for Statutory Auditors in the European Union (August 22, 2014). European Journal of Law and Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2485170 or http://dx.doi.org/10.2139/ssrn.2485170

Beatriz Garcia Osma

Universidad Carlos III de Madrid - Department of Business Administration ( email )

Calle Madrid 126
Getafe, Madrid, Madrid 28903
Spain

Ana Gisbert

Universidad Autónoma de Madrid ( email )

Avda. Francisco Tomás y Valiente, 5
Faculty of Economics
Madrid, Madrid 28049
Spain
0034 914976341 (Phone)

Elena De las Heras (Contact Author)

Universidad Autónoma de Madrid ( email )

Avda. Fco. Tomas y Valiente 5
Madrid, Madrid 28049
Spain

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