Consequences from the Empirical Findings for the European Capital Market


In this chapter I deduce consequences for European Union Regulation setting. Section A compares national requirements of Germany, France and the United Kingdom to investigate whether national regulation approaches and requirements differ significantly from what is being proposed by the European Union. This is, whether Member States use a rules- or principles-based national regulation approach and whether regulation differs in terms of the requirements’ content. I found differences in national regulation approaches and requirements, which may lead to audits of different quality throughout the European Union and therefore to differences in the risk of impaired auditor independence. I then describe possible effects of impaired auditor independence on the European capital market. Since one mechanisms to align information asymmetries concerning audits and thereby decreasing deficiencies in capital markets is greater transparency, the influence of transparency on impaired auditor independence risk as studied in a third experiment is presented in section B.


Corporate Governance Audit Committee Audit Firm Auditor Independence Transparency Report 
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© Deutscher Universitäts-Verlag | GWV Fachverlage GmbH, Wiesbaden 2006

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