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European audit regulators commence dialogue on audit quality issues with largest European audit networks

Thursday, 26th June, 2014: Independent audit regulators from Europe, including IAASA, have entered into a series of structured meetings with the largest European networks of audit firms. The meetings shall contribute to a better understanding of network structures and procedures and the networks’ approaches to maintain and improve the quality of their audits of financial statements or group accounts of Public Interest Entities (PIEs).

The meetings are organised within the framework of the European Audit Inspection Group (EAIG), which was established in 2011. The EAIG provides a pan-European platform for cooperation of audit regulators. IAASA is a member of the EAIG.

At the EAIG’s meeting in Copenhagen on 24 and 25 June 2014, hosted by the Danish Business Authority, the regulators met with representatives of EY Europe LLP. The meeting was the first of a series of meetings with other networks (BDO, Deloitte, Grant Thornton, KPMG and PwC) structured on a pan-European basis that builds on the experience of EAIG members throughout Europe and their previous interaction with the networks. Working groups of the EAIG will maintain an ongoing contact with the networks between these meetings.

The meeting in Copenhagen was the 12th meeting of the EAIG. Other topics discussed by the members included issues such as the EAIG’s development of a Common Audit Inspection Methodology (CAIM) and changes in the EU regulatory framework relevant for inspections of PIE audit firms.

In December 2013 the EAIG launched a database of inspection findings that is used by the regulators to identify common issues in relation to particular networks or the application of particular standards by audit firms in practice. This will not only contribute to the meetings with the networks, but also to the dialogue with the audit profession at large and with standard setters such as the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA).