The European Parliament endorsed a draft agreement Thursday on legislation to open up the audit services market in the European Union beyond Big Four firms.

The draft agreement aims to improve audit quality and transparency and to prevent conflicts of interest. The legislation requires auditors in the EU to publish audit reports according to International Standards on Auditing. For auditors of “public-interest entities,” which include banks, insurance companies and listed companies, audit firms would be required to provide shareholders and investors with a detailed understanding of what the auditor did and an overall assurance of the accuracy of the company's accounts.

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