Last week, the European Commission proposed a "directive" aimed at creating a set of rules on how audits should be conducted throughout the EU.

Among other items, the proposal would require companies to establish audit committees with independent directors to oversee the audit process, and would force auditors to publish annual "transparency reports" disclosing non-audit services and other details.

Within hours, the Confederation of British Industry—a powerful UK-based business lobbying group—had fired off a letter to EU Commissioner Frits Bolkenstein, arguing that the directive included matters of corporate governance that should be left to national codes.

Cridland

"Mandatory audit committees would undermine the UK's combined code and confine the process to an impractical legal straight-jacket," noted CBI deputy director-general John Cridland.

The EU's directive and CBI's response are below.

Download The EU Directive

Download The CBI's Response

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