Brussels (March 19, 2004) -- In the wake of accounting scandals such as Parmalat and Royal Ahold, the European Commission has proposed tougher audit rules, including mandatory auditor rotation and disclosure by public companies of the audit and non-audit fees paid to their auditors.

The proposals would, among other things, require disclosure by companies in the notes to their financial statements of the audit fee and other fees for non-audit services delivered by the auditor, but would not bar audit firms from providing consulting and other non-audit services. However, member states would be required to set rules for audit fees to prevent low-balling.

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