Commission publishes third report on EU market for statutory audit services

The European Commission published today its third report on developments in the EU market for statutory audit services to public-interest entities. The report, which has been prepared together with the Committee of European Audit Oversight Bodies (CEAOB), covers the years 2019 to 2021. It is based on data collected by the national audit oversight bodies in the EU every three years.

During the reported period, the number of individual auditors and audit firms in the EU declined further, and the audit market remained highly concentrated. Moreover, the audit and assurance sectors face multiple new challenges over the coming years, including technological developments and new legislative requirements, such as under the Corporate Sustainability Reporting Directive (CSRD). The report also finds that audit firms derived 67% of their revenue from non-audit services, which shows a continued focus beyond statutory audits.

To safeguard auditors’ independence and audit quality, there is a need to continue monitoring market developments closely and further strengthen the role of audit committees, national audit oversight bodies and the CEAOB, the report concludes.

For background, the current EU rules for statutory audit services were adopted in April 2014. They aim to improve statutory audits in the EU by reinforcing auditors’ independence and their professional scepticism towards the management of the audited company.

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Auditing of companies’ financial statements