The European Parliament adopted a joint resolution on corporate governance and supervision of financial services responding to the Parmalat case and other financial scandals.
Parliamentarians expressed their concern over the fact that 'neither the supervisors nor the regulatory authority nor the auditors nor the rating agencies' had the slightest suspicion that funds were being embezzled. They believe the financial services industry should 'clean up its act' and redouble its efforts to ensure that the small minority of fraudulent market participants are brought to justice. Financial institutions should reimburse investors for losses for which they are responsible.
More broadly, Parliament wants to strengthen corporate governance and financial supervision. A long term recommendation is the establishment of a single authority for financial prudential supervision in Europe.
Other suggestions include legislation to improve companies' auditing by forcing them to rotate their audit firm or the audit partner in charge of their accounts, and to prohibit auditors from providing non-audit services to audit clients.
© European Parliament
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