Regulation of the market for statutory audits

Copenhagen Economics was asked by the European Commission to prepare a review of their Impact Assessment (IA) on changes to the regulation of the market for statutory audits. Overall, Copenhagen Economics finds that some of the perceived key problems presented in the IA are insufficiently supported by the evidence base, and in many instances, evidence to the contrary has been ignored. A review of the evidence base leads us to conclude that the problems in the audit market are not as serious as claimed in the IA, and consequently there is no justification for radical policy interventions.