The European Parliament approved the controversial Eighth Directive, a sweeping reform measure that mandates new oversight rules for auditors.
However, details of the legislation must still be settled in upcoming negotiations between Parliament and the European Union nations.

The directive will create a oversight board for European firms, similar to the Public Company Accounting Oversight Board in the United States.
However, an earlier provision that would have forced every publicly traded company to appoint a special audit committee helmed by EU certified auditors was defeated.

Parliament also abandoned a plan to make firms rotate auditors a minimum of every seven years.

In published reports, Internal Markets Commissioner Charlie McCreevy said that the new oversight guidelines would foster "economic confidence."

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