Level playing field needed? Diverse approaches hamper consistent reporting and audit across Europe
Just what is a public interest entity, or PIE? In fact, the answer can vary depending on where you are: a useful new paper from Accountancy Europe summarises the significant variation in how European nations define PIEs. This is no abstract point but a highly relevant one, since certain EU laws only apply to PIEs, meaning that they must meet more demanding reporting and audit requirements. “The wide diversity in national PIE definitions results in these EU rules for PIEs having a different scope across countries.”
The paper therefore aims to inform policymakers on this issue in the context of the European Commission’s ongoing initiative on corporate reporting. Accountancy Europe argues that further simplification and streamlining of PIE definitions is needed to ensure a level playing field across Europe, and promises to continue exploring this matter to contribute to the debate.
Along similar lines, a second paper looks at public audit oversight and the highly diverse ways in which it is organised, executed and reported across Europe. “The different oversight regimes create complexity, additional compliance costs and practical and operational difficulties in the market. Audit firms and companies operating internationally respectively have to comply with and consider rules which vary from country to country. This may also hamper consistent application of the EU statutory audit rules. In addition, these heterogenous regimes across Europe likely serve as a deterrent for smaller audit firms to enter the PIE audit market,” it explains. Accountancy Europe therefore proposes a number of ways to improve and streamline audit oversight regimes, in areas such as status, structure and funding of oversight bodies; dialogue between supervisors and practitioners; and methodology and processes.