29 November 2004 — Publication

The Auditor’s Involvement with the New EU Prospectus Directive

The Auditor’s Involvement with the New EU Prospectus Directive


The Prospectuses Directive, which comes into force on 1 July 2005, intends to simplify the raising of capital in Europe, and is seen as a cornerstone in the creation of the single market for financial services. However, the desire to create an effective ‘single passport’ for issuers may not be fully realised, if the lack of clarity regarding the auditor’s report remains.

The Prospectuses Directive requires involvement of the auditor to give assurance on historical and prospective information. Current practice about the auditors involvement with a prospectus varies. Where historical information is restated for investors, the audit work will fall outside the scope of the statutory audit. Although not a standard setter, FEE is recognised as a thought leader on auditing issues. That is why FEE is taking this initiative to safeguard the quality of information that will be made available to investors and other market participants.

The purpose of the FEE paper is to provide national auditing standard setters with a framework within which standards might be developed in order to address the new requirements on auditors from the EU Prospectuses Directive. It is written in such way that it enables the standard setters to use it as their own document to give guidance to practitioners.

Please note that the deadline for comments on the Discussion Paper has been extended to 31 January 2004.

Position Paper