December 17, 2013 / 10:10 AM / in 4 years

EU in preliminary deal on audit market shake up

The early morning sun hits The Shard building as fog clears over London, September 5 , 2013. REUTERS/Dylan Martinez

LONDON (Reuters) - The European Union has reached a preliminary deal on forcing companies to change their accountants on a regular basis to improve book-keeping quality, the bloc’s presidency Lithuania said on Tuesday.

The reform was prompted by the 2007-09 financial crisis during which taxpayers had to rescue banks that had been given a clean bill of health by auditors only months earlier.

Requiring periodic change of auditor is also seen as a way of increasing competition in a sector dominated globally by the Big Four accounting firms: PwC, Deloitte, KPMG and EY.

The deal on a new EU law was reached after a meeting in Brussels of representatives from the bloc’s member states and the European Parliament, who have joint say.

“The framework of EU audit reform is preliminarily agreed and is subject to the final agreement by member states... later this week,” the EU presidency said in a statement.

Reporting by Huw Jones, editing by Clare Hutchison

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