Proposal for a regulation
Article 32 a (new)
Article 32a Appointment of more than one statutory auditor or audit firm by certain public- interest entities 1. Large public-interest entities shall appoint at least two statutory auditors or audit firms responsible for carrying out the statutory audit. 2. At least one of the statutory auditors or audit firms appointed shall not have received more than 15% of the total audit fees paid by large public-interest entities in the Member State concerned in the previous calendar year. The competent authority shall make public a list of the auditors or firms referred to in the first subparagraph which shall be updated on an annual basis. The competent authority shall use the information provided by statutory auditors and audit firms pursuant to Article 29 to make the relevant calculations. By derogation to the first subparagraph of this paragraph, an entity may appoint statutory auditors or audit firms that are among those who received more than 15% of the total audit fees paid by large public- interest entities in the Member State concerned in the previous calendar year, only if the appointment of auditors or firms of smaller dimension is not possible on the basis of objective grounds. By derogation from Article 34(1), the duration of the audit engagement following this appointment shall not exceed 5 years and shall not be renewable. The entity shall inform the competent authority referred to in Article 36(2) of the reasons for such decision. In the case of credit institutions and insurance undertakings, the reasons for such decision shall be laid down in the draft proposal referred to in 32(6). 3. Each statutory auditor or audit firm appointed shall comply with the following conditions: (a) an appointed statutory auditor or audit firm shall not belong to the network of any of the other appointed statutory auditor(s) or audit firm(s); (b) an appointed statutory auditor or audit firm shall not have belonged to the network of any of the other appointed statutory auditor(s) or audit firm(s) in the previous three years; (c) an appointed statutory auditor or the key audit partner who carries out a statutory audit on behalf of the audit firm shall not have been employed by any of the other statutory auditor(s) or audit firm(s) in the previous three years; 4. The statutory auditors or audit firms shall carry out the audit work in accordance with the instructions and work plan laid down in a working arrangement among them and agreed with the audited entity. Such arrangement shall also determine the principles that govern the distribution of the tasks to be carried out by each statutory auditor or audit firm in the accomplishment of their mission. The repartition of tasks shall be balanced among the auditors or firm. Where two auditors or firms are appointed, no auditor or firm shall be entitled to receive more than two thirds of the total fees for the statutory audit. Where three auditors or firms are appointed, no auditor or firm shall be entitled to receive more than one half of the total fees for the statutory audit and no auditor or firm shall be entitled to receive less than one fifth of the total fees for the statutory audit. 5. Each statutory auditor or audit firm shall perform the appropriate tasks in order to form his, her or its opinion with a view to contributing to the joint report referred to in Article 22(3). Each statutory auditor or audit firm shall review the work undertaken by the other statutory auditor(s) or audit firm(s) in order to evaluate the sufficiency and appropriateness of audit evidence obtained to form and opinion on the financial statements. The statutory auditors or audit firms carrying out the statutory audit shall be jointly and severally liable for the joint report referred to in Article 22(3). 6. The statutory auditors or audit firms appointed for the carrying out of the audit of the audited entity shall work together during the course of the audit engagement and shall agree on a regular redistribution of the tasks to be carried out by each statutory auditor or audit firm in the accomplishment of their mission during the course of the audit engagement. 7. ESMA shall develop draft regulatory technical standards to specify the conditions under which the statutory audit shall be jointly carried out by the appointed statutory auditors or audit firms. Such conditions shall at least include: (a) the principles that shall govern the distribution of the tasks to be carried out by each statutory auditor or audit firm; (b) the principles that shall govern the regular redistribution of the tasks during the course of the audit engagement; (c) the minimum content of the working arrangements between the appointed statutory auditors or audit firms, including the audit working plan; (d) the scope of the review by the statutory auditor(s) or audit firm(s) of the work undertaken by the other statutory auditor(s) or audit firm(s). Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Article 10 of Regulation (EU) No 1095/2010.