The European Union Commission on Wednesday threatened to retaliate if the United States requires European auditors to register with a new U.S. accounting oversight board.
“If we don’t get a reasonable compromise, it will be difficult to resist demands for equivalent registration in our member states,” said EU Internal Market Commissioner Frits Bolkestein.
The United States adopted tougher accounting and corporate governance rules in the aftermath of a rash of company and Wall Street scandals in 2002. Among other things, the law establishes a federal oversight board for the accounting industry, including non-U.S. firms that audit U.S.-listed companies.
Under the law, European auditors would have until next April to register with the board.
The Brussels-based EUC complains that double registration would cause unacceptable costs and red tape for European firms.
It believes new European auditing regulations, combined with the introduction of strict International Accounting Standards in 2005, will persuade Washington that Europe is serious about combating corporate fraud.