Activities of Saïd EL KHADRAOUI related to 2011/0359(COD)
Shadow opinions (1)
OPINION on the proposal for a regulation of the European Parliament and of the Council on specific requirements regarding statutory auditing of public-interest entities
Amendments (20)
Amendment 112 #
Proposal for a regulation
Recital 1
Recital 1
(1) Statutory auditors and audit firms are entrusted by law to conduct statutory audits of public-interest entities with a view to enhancing the degree of confidence of the public in the annual and consolidated financial statements of such entities. The public-interest function of statutory audit means that a broad community of people and institutions rely on the quality of a statutory auditor's work. Good audit quality contributes to the orderly functioning of markets by enhancing the integrity and efficiency of financial statements. Thereby, auditors fulfil a particularly important societal role. To fulfil this important role in the best way, it should be guaranteed that the statutory auditors have a high level of expertise and independence when they execute this mission. The best guarantee to achieve this objective of high level audit expertise and independence consists in imposing that the majority of the fees of the auditor and the audit company, are generated by missions of statutory audits.
Amendment 116 #
Proposal for a regulation
Recital 11
Recital 11
(11) The provision of services other than statutory audit to audited entities by statutory auditors, audit firms or members of their networks may compromise their independence. Therefore, it is appropriate to require the statutory auditor, the audit firm and the members of their network not to provide non-audit services to their audited entities which could affect their independence. The provision of non-audit services by an audit firm to a company would prevent that audit firm from carrying out statutory audit of that company, thus resulting in a reduction of the audit firms available to provide statutory audit, in particular with regard to the audit of large public-interest entities where the market is concentrated. As a result, in order to secure that a minimum number of audit firms is able to provide audit services to large public-interest entities, it is appropriate to request that audit firms of significant dimension focus their professional activity on the carrying out of statutory audit, by imposing that the majority of their fees should be generated by the audit mission, and are not allowed to undertake other services unconnected to their statutory audit function such as consultancy or advisory services which could affect their independence.
Amendment 155 #
Proposal for a regulation
Article 8 – paragraph 1 – introductory part
Article 8 – paragraph 1 – introductory part
1. A statutory auditor or a key audit partner who carries out a statutory audit of a public-interest entity on behalf of an audit firm shall not, before a period of at least twofive years has elapsed since he or she resigned as a statutory auditor or key audit partner from the audit engagement, take up any of the following duties:
Amendment 156 #
Proposal for a regulation
Article 8 – paragraph 2
Article 8 – paragraph 2
2. Employees of a statutory auditor or an audit firm carrying out a statutory audit of a public-interest entity as well as any other natural person whose services are placed at the disposal or under the control of such auditor or firm shall not, when such employees or other natural persons are personally approved as statutory auditors, before a period of at least onthree years has elapsed since he or she was directly involved in the statutory audit activities, take up any of the duties referred to in points (a), b) and (c) of paragraph 1.
Amendment 158 #
Proposal for a regulation
Article 9 – paragraph 1 – subparagraph 2
Article 9 – paragraph 1 – subparagraph 2
For the purposes of the first subparagraph, contingent fees means fees for audit engagements calculated on a predetermined basis relating to the outcome or result of a transaction or the result of the work performed. Fees shall not be regarded as being contingent if a court or a competent authority has established them. In order to guarantee the necessary independence as well as the expertise, every auditor or audit firm, should generate the majority of its fees from statutory audit missions.
Amendment 165 #
Proposal for a regulation
Article 9 – paragraph 2
Article 9 – paragraph 2
2. When the statutory auditor or audit firm provides to the audited entity related financial audit services, as referred to in Article 10(2), the fees for such services shall be limited to no more than 105 % of the fees paid by the audited entity for the statutory audit.
Amendment 179 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 1
Article 10 – paragraph 1 – subparagraph 1
A statutory auditor or an audit firm carrying out statutory audit of public- interest entities may provide to the audited entity, to its parent undertaking and to its controlled undertakings statutory audit services and related financial audit services as far as they do not affect its independence.
Amendment 180 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 1
Article 10 – paragraph 1 – subparagraph 1
A statutory auditor or an audit firm carrying out statutory audit of public- interest entities may provide to the audited entity, to its parent undertaking and to its controlled undertakings statutory audit services and related financial audit services, as far as they do not affect its independence.
Amendment 275 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 1
Article 10 – paragraph 4 – subparagraph 1
When a member of the network to which the statutory auditor or the audit firm carrying out statutory audit of a public- interest entity belongs provides non-audit services to an undertaking incorporated in a third country controlled by the audited public-interest entity, the statutory auditor or the audit firm concerned shall assess whether his, her or its independencecompetent authority shall assess whether the independence of the statutory auditor or the audit firm concerned would be compromised by such provision of services by the member of the network.
Amendment 282 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 4
Article 10 – paragraph 4 – subparagraph 4
The provision of the services referred to in points (i) and (iv) to (viii) of paragraph 3(a) shall be presumconsidered to affect such independence.
Amendment 359 #
Proposal for a regulation
Article 27 – paragraph 2 – subparagraph 1 – point f
Article 27 – paragraph 2 – subparagraph 1 – point f
(f) a list of public-interest entities for which the statutory auditor or audit firm has carried out statutory audits during the preceding financial year and a list of the entities from which the statutory auditor or audit firm receives more than 5% of its annual revenue generated by fees coming from statutory audit and non audit services;
Amendment 361 #
Proposal for a regulation
Article 29 – paragraph 1
Article 29 – paragraph 1
A statutory auditor or audit firm shall provide annually to his, her or its competent authority a list of the audited public-interest entities by revenue generated from them. This list concerns revenues generated by audit and non audit services.
Amendment 364 #
Proposal for a regulation
Article 31 – paragraph 1 – subparagraph 2
Article 31 – paragraph 1 – subparagraph 2
At least onll the members of the audit committee shall have competence in auditing and another member in accounting and/or audiin accounting. The committee members as a whole shall have also competence relevant to the sector in which the audited entity is operating.
Amendment 389 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – point a
Article 32 – paragraph 3 – subparagraph 1 – point a
(a) the audited entity shall be free to invite any statutory auditors or audit firms to submit proposals for the provision of the statutory audit service on the condition that Article 33(2) is respected and that at least onthree of the invited auditors or firms isdo not one who received more than 15% of the total audit fees from large public-interest entities in the Member State concerned in the previous calendar year;
Amendment 407 #
Proposal for a regulation
Article 32 a (new)
Article 32 a (new)
Amendment 438 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 3
Article 33 – paragraph 1 – subparagraph 3
The maximum duration of the combined two engagements shall not exceed 67 years.
Amendment 445 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 4
Article 33 – paragraph 1 – subparagraph 4
Where throughout a continuous engagement of 67 years two statutory auditors or audit firms have been appointed, the maximum duration of the engagement of each statutory auditor or audit firm shall not exceed 914 years.
Amendment 457 #
Proposal for a regulation
Article 33 – paragraph 3
Article 33 – paragraph 3
3. 3. By way of derogation from paragraphs 1 and 2, on an exceptional basis the public- interest entity may request the competent authority referred to in Article 35(1) to grant an extension to re-appoint the statutory auditor or audit firm for an additional engagement. In case of appointment of two statutory auditors or audit firms, this third engagement shall not exceed threeseven years. In case of appointment of one statutory auditor or audit firm, this third engagement shall not exceed two years.
Amendment 486 #
Proposal for a regulation
Article 42 – paragraph 1 – subparagraph 2 – point a
Article 42 – paragraph 1 – subparagraph 2 – point a
(a) the risks arising from high concentration, including the demise of audit firms with significant market share, the disruption in the provision of statutory audit services whether in a specific sector or across sectors, the further accumulation of risk in the market and the impact on the overall stability of the financial sector; in case such risks arise, the competent authority has to report immediately to the EC.
Amendment 487 #
Proposal for a regulation
Article 42 – paragraph 1 – subparagraph 2 – point b
Article 42 – paragraph 1 – subparagraph 2 – point b
(b) the need to adopt legally binding measures to mitigate those risks.