Regulating auditor independence

Abstract

The article considers, from the perspective of the European Commission, what is the role of the regulator in seeking to intervene in the provision of statutory audit services. The role of the auditor is considered both from the perspective of the capital market and in an agency context, and the article assesses how this interacts with the regulator. It then goes on to examine a number of theoretically possible options for regulating audit independence and audit quality. It ends by presenting current Commission activity in this area.