# CE2004084EN.01030401.xml

| 3.4.2004 | EN | Official Journal of the European Union | CE 84/304 |
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3.4.2004

EN

Official Journal of the European Union

CE 84/304

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(2004/C 84 E/0352)

WRITTEN QUESTION P-0066/04

by Antonio Di Pietro (ELDR) to the Commission

(13 January 2004)

Subject:   Parmalat bankruptcy

Subject:

The unprecedented collapse of the Parmalat company in Italy with debts estimated at some EUR 10 billion, the biggest accounting fraud ever recorded in Europe, has dramatically highlighted the serious lack of stringent and effective rules capable of combating fraudulent corporate accounting practices.

In a single market such as the European market which is governed, in accordance with the Treaties, by the constitutional principles of free movement of persons, goods, capital and services, does the Commission not agree that, to protect European citizens more effectively against this type of fraud, and in line with the principle of free competition between undertakings subject to compliance with common rules, it should take urgent action in the form of Community measures to ensure enhanced supervision of corporate account auditing in the Union?

Does the Commission not consider, by the standards of Community law, that Italy's current regulatory system for S.p.A.s (joint-stock companies) is inadequate, particularly as regards the role played by Consob and the Bank of Italy?

Answer given by Mr Bolkestein on behalf of the Commission

(17 February 2004)

(17 February 2004)

Although it will always remain impossible to prevent all fraudulent behaviour, the Commission agrees that urgent action is needed in order to restore the confidence of investors in capital markets by making it more difficult to commit fraud, by clarifying the duties of board members and auditors, by tightening the public oversight over the audit profession and by improving co-operation between oversight bodies in the EU and with third countries. This is the reason why the Commission proposed in its Action Plan on Statutory Audit (1), a number of measures aimed at improving the quality of statutory audit throughout the EU and why the Commission announced in its Action Plan on Company Law (2) a number of initiatives in order to improve corporate governance.

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The Commission intends to propose in March 2003 a revision of the 8th Company Law Directive (3) which will deal with issues such as the registration of auditors, ethics and independence, auditing standards and audit reporting, audit quality assurance, investigations and sanctions, public oversight, communication between the auditor and the board of directors and regulatory co-operation between oversight bodies in the EU and with oversight bodies of third countries. The Commission also intends to try to accelerate some of the corporate governance measures announced in the Action Plan on Company Law, such as the role of independent non-executive or supervisory directors, the clarification of the collective responsibility of all directors for financial and key non-financial information and the disclosure of group structures and intra-group transactions.

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The Commission does not consider it appropriate to make specific comments on the adequacy of the current regulatory system in Italy. With the measures indicated above, the Commission seeks to improve regulatory co-operation between all EU oversight bodies. Stronger co-ordination of oversight activities at EU level will have beneficiary consequences for improving the present situation in Member States, ‘inter alia’ by exchanging best practice, advising on audit standards, etc.

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(1)  Commission Communication of 21 May 2003 on ‘Reinforcing the statutory audit in the EU’, OJ C 236, 2.10.2003.

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(2)  Commission Communication of 21 May 2003 on ‘Modernising Company Law and Enhancing Corporate Governance in the EU — A Plan to Move Forward’, COM(2003) 284 final.

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(3)  Eighth Council Directive 84/253/EEC of 10 April 1984 on the approval of persons responsible for carrying out the statutory audits of accounting documents, OJ L 126, 12.5.1984.

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