{"id":159,"date":"2026-05-01T10:52:19","date_gmt":"2026-05-01T07:52:19","guid":{"rendered":"https:\/\/projects.snau.edu.ua\/eutrust\/?page_id=159"},"modified":"2026-05-01T10:53:53","modified_gmt":"2026-05-01T07:53:53","slug":"research-insight-1","status":"publish","type":"page","link":"https:\/\/projects.snau.edu.ua\/eutrust\/platforma-znan\/research-insight-1\/","title":{"rendered":"Research Insight #1"},"content":{"rendered":"\n
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\ud83c\uddec\ud83c\udde7 ENGLISH VERSION<\/h2>\n\n\n\n


Did EU Audit Reform Deliver? Empirical Evidence on Audit Quality After the 2014 Regulatory Overhaul<\/strong><\/p>\n\n\n\n

Based on: <\/em>Mnif, Y., & Bouassida, M. (2026).<\/strong> EU audit reform and audit quality: did European regulators hit the mark? Managerial Auditing Journal, 41(1), 191\u2013227. https:\/\/doi.org\/10.1108\/MAJ-09-2024-4465<\/a><\/em> <\/p>\n\n\n\n

The 2014 EU audit reform — enacted through Directive 2014\/56\/EU and Regulation (EU) No 537\/2014, in force from June 2016 — constitutes «the most important reform of audit regulation in the history» of the European Union. Targeting public-interest entities (PIEs), it introduced five key mechanisms: mandatory audit firm rotation, prohibition of non-audit services (NAS), a cap on permissible NAS fees, reinforced audit committee powers, and extended auditor reporting requirements. The legislative ambition was explicit — to eliminate the structural conflicts of interest that contributed to the 2007\u20132008 financial crisis and to rebuild institutional trust in financial reporting.<\/a><\/p>\n\n\n\n

Research Design and Sample<\/strong><\/p>\n\n\n\n

Mnif and Bouassida (2026) are the first to empirically assess the impact of the EU audit reform on audit quality immediately after the regulatory change<\/strong>, comparing the post-reform period directly against the pre-regulation baseline. Using a sample of European listed companies<\/strong>, the authors measured audit quality through discretionary accruals<\/strong> — the standard proxy for earnings management: higher discretionary accruals signal weaker audit quality, as they indicate that auditors permitted more managerial manipulation of reported financial results. The multivariate model controlled for firm size, leverage, return on assets, and auditor characteristics.<\/a><\/p>\n\n\n\n

What the Numbers Reveal<\/strong><\/p>\n\n\n\n

The results show a statistically significant negative relationship<\/strong> between the introduction of the 2014 EU regulation and earnings management — meaning that, overall, the reform period was associated with reduced discretionary accruals, pointing to a measurable improvement in audit quality across the sample. However, this headline result masks sharply divergent effects across the reform’s individual provisions:<\/a><\/p>\n\n\n\n