I propose to take Questions Nos. 266 to 270, inclusive, together.
These draft audit measures are currently in the process of adoption by the EU Institutions, following which they will require to be given effect by Member States. In these circumstances, it is unclear as to the purpose to be served either by an extrapolation of costs based on estimates in the EU Commission documentation which accompanied its original proposals, which differ significantly from those which emerged from the process of negotiation, or of referral to the Oireachtas Committee on EU Affairs on the basis indicated. Obviously, it is open to the Committee in question to examine such matters within its purview as it considers appropriate.
It is difficult to envisage that graduate or other recruitment to the audit profession will be adversely affected by these audit proposals, in particular as enhanced audit provisions are entailed. The differing points of view regarding these audit proposals are moot at this point, as are positions adopted in other non-EU jurisdictions, in a situation where the focus required is on making the necessary arrangements to give effect to the EU measures when enacted. In this connection, the Department will be consulting with all of the stakeholders shortly after the adoption by the EU of the instruments in question.
The UK Competition Commission in October 2013, having confirmed that competition is restricted as regards the supply of audit services to large companies there, published measures to open up the UK market to greater competition. One of these is a requirement that FTSE 350 companies must put their statutory audit engagement out to tender at least every ten years. This is consistent with the provisions of Article 33 of the draft Audit Regulation relating to the duration of the audit engagement. Officials of my Department appeared before the Oireachtas Joint Committee on Jobs, Enterprise and Innovation on 16 October and 18 December 2012 for the purpose of its scrutiny of these EU audit proposals.
Arising from the scrutiny process, the Joint Committee wrote to the EU Commission and the EU Parliament in the matter on 15 March 2013, remitting its report and a political contribution on the audit proposals, stating that the Joint Committee “Concludes that reform of the audit sector is necessary in the context of the recent past and therefore welcomes, in broad terms, the Commission’s proposals”. As regards the issue of auditor rotation the Joint Committee stated that it “Supports the concept of mandatory rotation of auditors to ensure independence in the performance of the function and the avoidance of any perception of long-term closeness between client and auditor.”