The European Association of Co-operative Banks (EACB) understands the intention of European Legislators to improve the quality of audit by providing a robust framework for auditor independence and corporate governance. In some Member States audit systems of decentralized sectors are characterised by the principle of permanent statutory mandate of associations. Their member audits have proven sound and should thus be acknowledged. But even where such systems do not exist, we have reservations against the mandatory rotation of audit firms. In particular, we have strong doubts regarding mandatory rotation after 6 years already (9 years in the case of joint audit). In order to avoid an increase of the burden for small banks, we think that mandatory rotation rules after 6 years (and 9 years in the case of joint audit) for the audit industry should not be implemented.
For the full position paper please download the PDF.