Activities of Eva LICHTENBERGER related to 2011/0359(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council on specific requirements regarding statutory audit of public-interest entities PDF (1 MB) DOC (1 MB)
Legal basis opinions (0)
Amendments (53)
Amendment 217 #
Proposal for a regulation
Recital 24
Recital 24
(24) It is also important that the role of the audit committee in the selection of a new statutory auditor or audit firm be reinforced, for the benefit of a more informed decision of the general meeting of shareholders or members of the audited entity. Hence, when making a proposal to the general meeting, the board should explain whether it follows the recommendation of the audit committee and, if not, why. The recommendation of the audit committee should include at least two possible choices for the audit engagement and a duly justified preference for one of them, so that the general meeting can make a real choice. In order to provide a fair and proper justification in its recommendation, the audit committee should use the results of a mandatory selection procedure organised by the audited entity, under the responsibility of the audit committee. In such selection procedure, the audited entity should invite statutory auditors or audit firms, including smallernon-dominant ones, to present proposals for the audit engagement. Tender documents should contain transparent and non- discriminatory selection criteria to be used for the evaluation of proposals. Considering, however, that this selection procedure could entail disproportionate costs for companies with reduced market capitalisation or small and medium-sized public-interest entities having regard to their dimension, it is appropriate to relieve such entities from this obligation.
Amendment 222 #
Proposal for a regulation
Recital 26
Recital 26
(26) The appointment of more than one statutory auditor or audit firm by the public-interest entities would reinforce the professional scepticism and contribute to increasing audit quality. Also, this measure combined with the presence of smallernon- dominant audit firms would facilitate the development of the capacity of such firms, thus contributing to increasing the choice of statutory auditors and audit firms for public-interest entities. Therefore, the latter should be encouraged and incentivised to appoint more than one statutory auditor or audit firm to carry out the statutory audit.
Amendment 242 #
Proposal for a regulation
Recital 47 a (new)
Recital 47 a (new)
(47a) This regulation recognises co- statutory audit as an effective way to improve audit quality, strengthen the independence of auditors and contribute to the decentralization of the audit market. The co-statutory audit is based on a balanced division of tasks and a review of the other auditors work. It both allows the auditors to form their own opinion on the financial statements and helps reduce the risk of familiarity between the auditor and the audited entity.
Amendment 243 #
Proposal for a regulation
Recital 47 b (new)
Recital 47 b (new)
(47b) Reporting on the audited entities' performance on their official Corporate Social Responsibility (CSR) policy as well as on non-financial provisions contained in the fourth directive on annual accounts 2003/51/EC is conducive to investor’s needs and to public demands for greater responsibility of public interest entities.
Amendment 244 #
Proposal for a regulation
Recital 47 c (new)
Recital 47 c (new)
(47c) Traditionally auditors have conducted ex-post audits and the main objective has been to verify income, expenses assets and liabilities, which have generally been the outcome of past transactions. However, the intensification of finance in economy has produced new complex financial instruments whose value is dependent on uncertain future events and marked volatility which challenges the reliability of audit reports and the understanding of overall risk.
Amendment 245 #
Proposal for a regulation
Recital 47 d (new)
Recital 47 d (new)
(47d) Any sign of aggressive tax planning of an PIE should be communicated without delay to the competent authority and the national tax authority.
Amendment 251 #
Proposal for a regulation
Article 5 – paragraph 1 a (new)
Article 5 – paragraph 1 a (new)
1a. Where a cooperative within the meaning of Article 2(14) of Directive 2006/43/EC, or savings bank as referred to in Article 45 of Directive 86/635/EEC, a subsidiary or a legal successor of a cooperative, or savings bank as referred to in Article 45 of Directive 86/635/EEC is required or permitted under national provisions to be a member of a non-profit- making auditing entity, an objective, reasonable and informed party would not conclude that the membership-based relationship compromises the statutory auditor's independence, provided that when such an auditing entity is conducting a statutory audit of one of its members, the principles of independence laid down in this Chapter are applied to the auditors carrying out the audit and those persons who may be in a position to exert influence on the statutory audit.
Amendment 262 #
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 onefour 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 269 #
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. Where the audited entity has appointed more than one statutory auditor or audit firm, the fees for the related financial audit services referred to in Article 10(2) shall be limited for each statutory auditor or audit firm, to no more than 15% of the fees paid by the audited entity for the statutory audit.
Amendment 345 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new)
Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new)
(viiia) general management consultancy services
Amendment 349 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point viii b (new)
Article 10 – paragraph 3 – subparagraph 3 – point a – point viii b (new)
(viiib) tax consultancy and advising services
Amendment 351 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point viii c (new)
Article 10 – paragraph 3 – subparagraph 3 – point a – point viii c (new)
Amendment 366 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point b – point iv
Article 10 – paragraph 3 – subparagraph 3 – point b – point iv
(iv) due diligence services to the vendor or the buy side on potential mergers and acquisitions and providing assurance on the audited entity to other parties at a financial or corporate transaction.
Amendment 423 #
Proposal for a regulation
Article 14 – paragraph 2
Article 14 – paragraph 2
2. Without prejudice to the reporting requirements as referred to in Articles 22 and 23, the scope of statutory audit shall not include the assuranceoverall risks on the future viability of the audited entity norand auditors may report on the efficiency or effectiveness with which the management or administrative body has conducted or will conduct the affairs of the entity.
Amendment 424 #
Proposal for a regulation
Article 15 – paragraph 2
Article 15 – paragraph 2
The statutory auditor or the audit firm shall maintain professional scepticism in particular when reviewing management estimates relating to fair valuevaluation methods such as fair value, overall risks and the impairment of goodwill and other intangible and future cash flow relevant to the consideration of the going concern.
Amendment 427 #
Proposal for a regulation
Article 16 – paragraph 5 – subparagraph 1 – point c
Article 16 – paragraph 5 – subparagraph 1 – point c
(c) an audit plan setting out the probable scope and method of the statutory audit; and, where more than one statutory auditor or audit firm have been appointed, the distribution of tasks among the appointed statutory auditors or audit firms
Amendment 433 #
Proposal for a regulation
Article 21 – paragraph 1 – indent 2
Article 21 – paragraph 1 – indent 2
– an additional report to the audit committee and the competent authority in accordance with Article 23 c.
Amendment 434 #
Proposal for a regulation
Article 21 – paragraph 1 – indent 2 a (new)
Article 21 – paragraph 1 – indent 2 a (new)
- an additional non-financial and CSR report in accordance with Article 23 b
Amendment 436 #
Proposal for a regulation
Article 22 – paragraph 2 – introductory part
Article 22 – paragraph 2 – introductory part
2. The audit report shall be in writing and in digital form. It shall at least:
Amendment 446 #
Proposal for a regulation
Article 22 – paragraph 2 – point n
Article 22 – paragraph 2 – point n
(n) explain to what extent the statutory audit was designed to detect off balance sheet assets and irregularities, including fraud;
Amendment 454 #
Proposal for a regulation
Article 22 – paragraph 2 – point w a (new)
Article 22 – paragraph 2 – point w a (new)
(wa) report on the audited entity's CSR performance with regard to its official CSR policy
Amendment 455 #
Proposal for a regulation
Article 22 – paragraph 3
Article 22 – paragraph 3
3. When more than one statutory auditor or audit firm have been appointed to carry out the statutory audit of the public-interest entity, they shall agree on the results of the statutory audit and submit a joint report and opinion. In case of disagreement, each statutory auditor or audit firm shall submit his, her or its opinion separately. If one statutory auditor or audit firm qualifies his, her or its opinion, submits an adverse opinion or a disclaimer of opinion, the overall opinion shall be considered as qualified, adverse opinion or a disclaimer of opinion. In a separate paragraph each statutory auditor or audit firm shall state the reasons of disagreement. In case of disagreement, each auditor shall report to the competent authority their reasoned opinion.
Amendment 457 #
Proposal for a regulation
Article 22 – paragraph 4
Article 22 – paragraph 4
4. The audit report shall not be longer than four pages or 10000 characters (without spaces). It shall not contain any cross- references to the additional report to the audit committee referred to in Article 23. Auditors shall strive to write in non- technical language and the audit report shall contain explanations of any technical term used.
Amendment 462 #
Proposal for a regulation
Article 23 – paragraph 1 – subparagraph 1
Article 23 – paragraph 1 – subparagraph 1
The statutory auditor(s) or the audit firm(s) carrying out statutory audit of public- interest entities shall submit an additional report to the audit committee of the audited entity and to the competent authority.
Amendment 478 #
Proposal for a regulation
Article 23 – paragraph 2 – point f
Article 23 – paragraph 2 – point f
(f) indicate and explain judgments about material uncertainty and overall risks that may cast doubt about the entity's ability to continue as a going concern;
Amendment 482 #
Proposal for a regulation
Article 23 – paragraph 2 – point n a (new)
Article 23 – paragraph 2 – point n a (new)
(na) indicate whether there are any signs that the audited entity has any assets off balance sheet.
Amendment 483 #
Proposal for a regulation
Article 23 – paragraph 2 – point n b (new)
Article 23 – paragraph 2 – point n b (new)
(nb) describe the efficiency and effectiveness with which the management or the administrative body has conducted or will conduct the affairs of the audited entity
Amendment 484 #
Proposal for a regulation
Article 23 – paragraph 2 – point n c (new)
Article 23 – paragraph 2 – point n c (new)
(nc) indicate any sign of aggressive tax planning strategies of a public interest entity. When becoming aware of aggressive tax planning strategies of a public interest entity, the statutory auditor or audit firm shall automatically alert the competent authority and the respective national tax authorities.
Amendment 489 #
Proposal for a regulation
Article 23 – paragraph 5
Article 23 – paragraph 5
5. Upon request, tThe statutory auditor(s) or the audit firm(s) shall make available without delay the additional report to the competent authorities.
Amendment 490 #
Proposal for a regulation
Article 23 a (new)
Article 23 a (new)
Article 23a Additional non-financial and Corporate Social Responsibility (CSR) report From 1.1.2014, the statutory auditors(s) or the audit firm(s) carrying out statutory audit of public-interest entities shall submit an additional report on the non- financial and CSR performance of public interest entities. The public interest entities shall make public an annual non- financial and CSR report at the latest three months after the end of each financial year. The annual non-financial and CSR report shall be published on the website of the statutory auditor or audit firm and shall remain available on that website for at least five years. Further the additional audit report shall contain the official CSR policy of the audited public interest entity. CSR is here understood as the public interest entities voluntary integrated responsibility with regards to human rights, social issues, environmental issues, climate issues and the fighting of corruption. If the public interest entity have no CSR policy on these issues the auditor shall note this in the audit report. The CSR reporting should be separate form the non-financial reporting. The CSR reporting shall at least contain: (a) the CSR policy of the public interest entity, standards, guidelines or principles of social responsibility. If the policies is adopted from UN Global Compact, the ILO or OECD guidelines (b) how the public interest entity transform its CSR policy into action and systems or procedures on this matter. (c) the management of public interest entity own judgement of the performance on the CSR policy and the expectations of future CSR policy. The Commission shall draft a delegated act by 1.7.2013, laying out mandatory standards for auditors to report on the audited entities' performance on their official Corporate Social Responsibility (CSR).
Amendment 498 #
Proposal for a regulation
Article 24 – paragraph 2
Article 24 – paragraph 2
The statutory auditor(s) or audit firm(s) shall report to the audit committee on key matters arising from the statutory audit, and in particular on material weaknesses in internal control in relation to the financial reporting process. Upon request of any of the parties, the statutory auditor(s) or audit firm(s) shall discuss these matters with the audit committee., and, when more than one statutory auditor or audit firm have been appointed, the distribution of tasks between them
Amendment 504 #
Proposal for a regulation
Article 26 – paragraph 1 – subparagraph 1
Article 26 – paragraph 1 – subparagraph 1
An audit firm that carries out statutory audits of public-interest entities shall make public on its website its annual financial report within the meaning of Article 4(2) of Directive 2004/109/EC at the latest fourthree months after the end of each financial year.
Amendment 507 #
Proposal for a regulation
Article 27 – paragraph 2 – subparagraph 1 – point k a (new)
Article 27 – paragraph 2 – subparagraph 1 – point k a (new)
(k a) a statement on the official CSR policy of the statutory auditor
Amendment 512 #
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 shall be provided in aggregated form to ESMA.
Amendment 532 #
Proposal for a regulation
Article 32 – paragraph 1 – subparagraph 2
Article 32 – paragraph 1 – subparagraph 2
Where Article 37(2) of Directive 2006/43/EC applies, the public-interest entity shall only inform the competent authority of the use of the alternative systems or modalities referred to in that Article; in this case paragraphs 2 to 6 of this Article shall not apply.
Amendment 535 #
Proposal for a regulation
Article 32 – paragraph 2 – subparagraph 3
Article 32 – paragraph 2 – subparagraph 3
When it concerns the renewal of an audit engagement in accordance with the second subparagraph of Article 33(1), the audit committee shall, for the preparation of its recommendation, take into consideration any findings and conclusions on the recommended statutory auditor or audit firm referred to in Article 40(6) and published by the competent authority pursuant to Article 44(d). In this case the public-interest entity shall provide a publicly available justification of the re- appointment of the statutory auditor
Amendment 541 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – point b
Article 32 – paragraph 3 – subparagraph 1 – point b
(b) the audited entity shall be free to choose the method to contact the invited statutory auditor(s) or audit firm(s) and shall not be required to publish a call for tenders in the Official Journal of the European Union and/or in national gazettes or newspapers;.
Amendment 548 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 3
Article 32 – paragraph 3 – subparagraph 3
For the purposes of point (a) of the first subparagraph, the competent authority referred to in Article 35(1) shall make public a list of the auditors and audit firms concerned 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 28 to make the relevant calculations. This shall be provided in aggregated from to ESMA.
Amendment 555 #
Proposal for a regulation
Article 32 – paragraph 7 – subparagraph 2
Article 32 – paragraph 7 – subparagraph 2
The public-interest entity shall inform directly and without delay the competent authorities referred to in Article 35 of any attempt by a third party to impose such a contractual clause or to otherwise influence the decision of the general meeting of shareholders on the selection of a statutory auditor or audit firm.
Amendment 573 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 2 a (new)
Article 33 – paragraph 1 – subparagraph 2 a (new)
The public-interest entity shall launch a public tendering process of the statutory auditor contract every third year in accordance with Article 32 (3).
Amendment 597 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 4 a (new)
Article 33 – paragraph 1 – subparagraph 4 a (new)
In case an audit is performed by more than one statutory auditor or audit firm, each of them 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 an opinion on the financial statement
Amendment 616 #
Proposal for a regulation
Article 33 – paragraph 3
Article 33 – paragraph 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 three years. In case of appointment of one statutory auditor or audit firm, this third engagement shall not exceed two years. In the case of re-appointment the public-interest entity shall provide a publicly available justification of the re- appointment of the statutory auditor
Amendment 617 #
Proposal for a regulation
Article 33 – paragraph 4 – subparagraph 1
Article 33 – paragraph 4 – subparagraph 1
The key audit partner(s) responsible for carrying out a statutory audit shall cease his, her or their participation in the statutory audit of the audited entity after a period of sevenfour years from the date of appointment has elapsed. He, she or they may participate in the statutory audit of the audited entity again after a period of at least three years.
Amendment 618 #
Proposal for a regulation
Article 33 – paragraph 4 – subparagraph 2
Article 33 – paragraph 4 – subparagraph 2
The statutory auditor or audit firm shall establish an appropriate four year gradual rotation mechanism with regard to the most senior personnel involved in the statutory audit, including at least the persons who are registered as statutory auditors. The gradual rotation mechanism shall be undertaken in phases on the basis of individuals rather than of a complete team. It shall be proportionate in view of the scale and the dimension of the activity of the statutory auditor or audit firm.
Amendment 621 #
Proposal for a regulation
Article 33 – paragraph 4 – subparagraph 2 a (new)
Article 33 – paragraph 4 – subparagraph 2 a (new)
An auditor switching to another statutory auditor or audit firm shall cease to be involved in auditing a PIE or its related third parties the auditor was involved in previously for a period of four years
Amendment 628 #
Proposal for a regulation
Article 33 – paragraph 6 – subparagraph 1
Article 33 – paragraph 6 – subparagraph 1
ESMA shall develop draft regulatory technical standards to specify technical requirements on the content of the handover file referred to in paragraph 6 and on the performance of statutory audits by more than one statutory auditor or audit firms including the distribution of tasks between auditors. The latter should at least include: (a) the principle 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 arrangement between the appointed statutory auditor or audit firms, including the audit working plan.
Amendment 638 #
Proposal for a regulation
Article 35 – paragraph 1 – subparagraph 2 – introductory part
Article 35 – paragraph 1 – subparagraph 2 – introductory part
The competent authority/authorities shall be one of the following:
Amendment 641 #
Proposal for a regulation
Article 35 – paragraph 1 – subparagraph 2 – point c
Article 35 – paragraph 1 – subparagraph 2 – point c
(c) the competent authorityies referred to in Article 32 of Directive 2006/43/EC.
Amendment 669 #
Proposal for a regulation
Article 40 – paragraph 5 – subparagraph 1 – point b
Article 40 – paragraph 5 – subparagraph 1 – point b
(b) adequate compliance testing of procedures and a review of audit files of public interest entities in order to verify the effectiveness of the internal quality control system; including appropriate division of tasks
Amendment 675 #
Proposal for a regulation
Article 46 – paragraph 1 – subparagraph 1 a (new)
Article 46 – paragraph 1 – subparagraph 1 a (new)
Article 19 of the REGULATION (EU) No 1095/2010 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a European Supervisory Authority (European Securities and Markets Authority), relating to the settlement of disagreements between competent authorities in cross- border situations, setting out the powers of binding mediation, shall apply to all relevant articles of this Regulation and directive [to be inserted]
Amendment 705 #
Proposal for a regulation
Article 53 – paragraph 1
Article 53 – paragraph 1
1. Colleges of competent authorities may be established in order to facilitate the exercise of the tasks referred to in Articles 40, 41, 50, 51, 52 and 61 with regard to specific statutory auditors, audit firms or their networks, or any other matter relevant for the implementation of this regulation and directive [to be inserted] The colleges of competent authorities shall provide an effective and flexible permanent forum for cooperation and coordination among the authorities responsible for and involved in supervision. Where appropriate, colleges may cooperate with other authorities.
Amendment 708 #
Proposal for a regulation
Article 53 – paragraph 7 a (new)
Article 53 – paragraph 7 a (new)
7 a. The competent authorities involved in the supervision of any of the relevant activities of a cross-border statutory auditor or audit firm operating in at least 15 member states, shall form a college of competent authorities. ESMA shall be part of the colleges and act in accordance with article 21 of REGULATION (EU) No 1095/2010.
Amendment 722 #
Proposal for a regulation
Article 62 – paragraph 2 – point h a (new)
Article 62 – paragraph 2 – point h a (new)
(h a) an immediately end of the audit engagement concerned following the procedure of normal expiry of the maximum duration of engagement as described in article 33, 2