In anticipation of the European Commission's plans to review and reform the audit market, the Dutch Parliament approved a bill on Feb. 14 that would set strict rules regarding auditor terms and the content of the mandate.

Following a parliamentary investigation on the causes of the financial crisis in the Netherlands, the Dutch government submitted a bill that seeks to reduce the chance that auditors would unjustly provide unqualified opinions. Opposition political parties submitted amendments that were approved and are now subject to approval by the Dutch Senate before becoming law.

The bill sets two important restrictions:

• The auditor may not provide non-audit services to the company for which the auditor provides the statutory audit of the financial statements. Up until two years after the effectuation date of the bill, non-audit services may be provided as part of contractual obligations.
• It will be mandatory that the auditor is changed every eight years. There will be a cooling-off period of two years, after which the previous auditor may be mandated again. It is expected that this part of the bill be applicable as of January 2014.

Meanwhile, in the United States, the Public Company Accounting Oversight Board plans to hold a roundtable on March 21-22 on auditor rotation and other measures to bolster audit firm independence.