Brussels intends to bring the auditors to heel

"Brussels is taking up the ax against the auditors",[headlines the Financial Times Deutschland](http:// http://www.ftd.de/unternehmen/handel-dienstleister/:kritik-an-unternehmensberatung-frontalangriff-auf-wirtschaftspruefer/60109124.html), reporting on the intent of the European Commission to strip the big audit firms of one of their most lucrative services: their corporate advisory branches. It is by coupling company valuation and advice to the same companies, though, that firms such as PricewaterhouseCoopers, KPMG, Ernst & Young and Deloitte are bringing in significant revenues – four billion euros a year in Germany alone. Unfortunately for the auditors, confidence in them has evaporated following the collapse of the energy giant Enron, which was brought down by scandals over its faked balance sheets. The accusation levelled against the firms is that they are not sufficiently independent to carry out both auditing and consulting. Michel Barnier, European Commissioner for Internal Market and Services, will therefore present a radical reform of the consultancies in November. "Resistance will be prolonged," warns the Hamburg newspaper.