14 Utrecht L. Rev. 1 (2018)

handle is hein.journals/utrecht14 and id is 1 raw text is: 

               UtrechtL                                                                ew

                              This article is published in a peer-reviewed section of the Utrecht Law Review

Auditing Standards and the Accountability

of the European Court of Auditors (ECA)

Alex Brenninkmeijer,   Gaston   Moonen,   Raphael   Debets,  Branislav Hock*

1. Introduction

Global regulation increasingly relies on alternatives of international legislation. Whether through various
guidelines, standards, or declarations produced by organized transnational networks that involve public,
private, or hybrid actors, the growing informality of international law making has been a recurring subject of
legal analysis. These informal outputs, processes, and actors have been described as a rise in private-sector
power  that produces flexible, informal, and hence more effective institutions, while the regulatory state's
role is decreasing.' However, the lack of legitimacy and accountability accompanying these processes has
arguably resulted in major problems such as financial breakdowns or human  rights violations.2 Therefore,
while informal law-making brings many positives, we need to improve our understanding of how to balance
them  with public accountability.'
   Financial and  compliance  audits of the European  Court  of Auditors (ECA) are an  example  of the
informality of international law making because they are governed by standards that concern the different
aspects of the professionalism of auditors and their audits. These standards are developed in the context
of international private-sector networks and, therefore, outside the EU's legal framework. Some of such
standard-setting bodies are the International Accounting Standards Boards  (IASB) and the International
Federation of Accountants  (IFAC). Being private-sector bodies, they differ from classical standard-setting
bodies.' Hence, while competences  of the ECA are based on the Treaty on the Functioning of the European
Union  (TFEU), international private bodies without legally founded decision-making powers are able to
strongly influence the standards that the ECA follows. Therefore, it is necessary to answer the following
question: How can audit standards determined by the private sector be better aligned to administrative law
to reflect the realities of public-sector auditing in the framework of the ECA?
   This article aims to improve our understanding ofthe institutional complementarity between transnational
private regulation and public regimes. It gives an overview of the question of democratic accountability
when  using standards emanating from  the private sector in public-sector auditing and accounting. Then, it
explains the structure of auditing and accounting standards and how they fit into the ECA's legal framework

*  Alex Brenninkmeijer is Member of the European Court of Auditors and Professor at the Institute of Constitutional, Administrative Law and
   Legal Theory at Utrecht University (a.f.m.brenninkmeijer@uu.nl). Gaston Moonen is staff member at the Directorate of the Presidency at
   the European Court of Auditors (antonius.moonen@eca.europa.eu). Raphael Debets is Head of the Private Office at the European Court
   of Auditors (raphael.debets@eca.europa.eu). Dr Branislav Hock is lecturer at the University of Portsmouth (branislav.hock@port.ac.uk)
   and member of the Tilburg Law and Economics Center (TILEC), which supports and encourages academic research on the governance
   of economic activity. The opinions expressed by the authors in this publication in no way commit the European Court of Auditors. The
   authors would like to express their sincere gratitude to Ms Charline Binard for her useful comments.
1  See the global administrative law literature, N. Krisch & B. Kingsbury, 'Introduction: Global Governance and Global Administrative Law in
   the International Legal Order', (2006) 17 European Journal of International Law, no. 1.
2  See generally D. Held, Global Covenant (2004).
3  D. Curtin & L. Senden, 'Public Accountability of Transnational Private Regulation: Chimera or Reality?', (2011) 38 Journal of Law and
   Society, no. 1, p. 187.
4  D. Kerwer, 'Rules that Many Use: Standards and Global Regulation', (2005) 18 Governance, pp. 611-632 at p. 615, Table 1 Key Standards
   for Sound Financial Systems.

www.utrechtlawreview.org  I Volume 14, Issue 1, 2018 1 http://doi.org/10.18352/ulr.417 I

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 2,700 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.

Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Access to this content requires a subscription. Please visit the following page to request a quote or trial:

Already a HeinOnline Subscriber?