The European Commission has decided to cut some of the red tape to allow audit firms from other countries, including the U.S., to operate in Europe.

The decision grants a transitional period for the registration requirements for audit firms from non-European Union countries. It also clarifies how the authorities in the EU's member states should deal with so-called "third-country" audit firms under the EU's Statutory Audit Directive, which the member states were supposed to have "transposed" into their national law on June 29 of this year. So far, 12 of the EU's 27 member states have completely implemented the directive and most of the others have transposed major parts of the directive.

"The implementation and enforcement Statutory Audit Directive is particularly important at a time when financial markets face a difficult period and need to rely on robust audits of financial statements," said Internal Market and Services Commissioner Charlie McCreevy (pictured) in a statement.

The decision allows 30 third-country audit firms to continue their audit activities regarding third-country companies listed on European markets by granting the audit firms a transitional period for the registration requirements until July 1, 2010. However, the transition will only be granted if the audit firms comply with the minimum information requirements for investors in Europe.

Besides the U.S., the decision also applies to Argentina, Australia, the Bahamas, the Bermudas, Brazil, Canada, the Cayman Islands, Chile, China, Croatia, Guernsey, Jersey, the Isle of Man, Hong Kong, India, Indonesia, Israel, Japan, Kazakhstan, Malaysia, Mauritius, Mexico, Morocco, New Zealand, Pakistan, Russia, Singapore, South Africa, South Korea, Switzerland, Taiwan, Thailand, Turkey, Ukraine and the United Arab Emirates.

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