MEPs: Firms must rotate auditors every 14 years

Rules to prevent auditors becoming too close to the companies they are auditing have been agreed by MEPs but this could cause major headaches for the Irish presidency in negotiations.

MEPs say companies should not be forced to change auditors any more often than every 14 years — and in some cases up to 25 years — arguing that doing so costs companies about 1,000 man hours.

Instead they say that transparency and ensuring no conflict of interest is the more important element in the new rules. As a result, auditors would not be allowed carry out a blacklist of non-audit services such as providing tax advisory services that affect a company’s financial statements but may provide a certificate of compliance.