The audit reform debate is also of course playing out on a wider scale in Europe. In September, the European Parliament's Committee on Legal Affairs published its draft report on the audit proposals tabled by the European Commission (EC) last November.

Mirroring the position reached by the FRC, the Committee (led by British MEP Sajjad Karim) has shelved the EC's radical proposals for mandatory rotation of auditors and creation of 'audit-only' firms. Instead, the revised draft Regulation produced by the Committee has suggested that public interest entities conduct a mandatory retender every 25 years, supported by interim 'independence threat assessments' of their statutory auditors and audit firms.

The draft Regulation has now progressed to the Economic and Monetary Affairs Committee, which is in turn expected to give its opinion this month before a final text is debated in the European Parliament. It was thought that the European timetable might be pushed back as a result of the delay in the UK Competition Commission publishing the preliminary findings of its investigation into the audit market (which is now due in January 2013). However, MEP Karim has confirmed they will press on with the European Commission's audit reforms