Activities of Sebastian Valentin BODU 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)
Amendments (74)
Amendment 211 #
Proposal for a regulation
Recital 23
Recital 23
(23) Audit committees, or bodies performing an equivalent function within the audited entity, have a decisive role in contributing to high-quality statutory audit. It is particularly important to reinforce the independence and technical competence of the audit committee by requiring that a majority of its members is independent and that at least onetwo members of the committee hasve competence in auditing and another one in auditing and/, taxation, finance or accounting. The Commission Recommendation of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board26 sets out how audit committees should be established and function. Considering, however, the dimension of boards in companies with reduced market capitalisation and in small and medium- sized public-interest entities, it would be appropriate that the functions assigned to the audit committee for those entities, or to a body performing equivalent functions within the audited entity, may be performed by the administrative or supervisory body as a whole. Public- interest entities which are UCITS or alternative investment funds should also be exempted from the obligation to have an audit committee. This exemption takes into account the fact that where those funds function merely for the purpose of pooling assets, the employment of an audit committee is not appropriate. UCITS and alternative investments funds, as well as their management companies, operate in a strictly defined regulatory environment and are subject to specific governance mechanisms such as controls exercised by their depositary.
Amendment 215 #
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 meetingadministrative or supervisory board 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 smaller ones, to present proposals for the audit engagement. TenderSelection 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 224 #
Proposal for a regulation
Recital 27
Recital 27
(27) In order to address the familiarity threat and therefore reinforce the independence of auditors and audit firms, it is important to establish a maximum duration of the audit engagement of a statutory auditor or audit firm in a particular audited entity. Ahat an appropriate gradual rotation mechanism should also be established with regard to the most senior personnel involved in the statutory audit, including the key audit partners carrying out the statutory audit on behalf of the audit firm. It is also important to provide for an appropriate period within which such statutory auditor or audit firm may not carry out the statutory audit of the same entity. In order to ensure a smooth transition, the former auditor should transfer a handover file with relevant information to the incoming auditor.
Amendment 231 #
Proposal for a regulation
Recital 32
Recital 32
(32) Investigations help to detect, prevent and correct inadequate carrying out of the statutory audit of public-interest entities. Therefore, competent authorities should be empowered to undertake investigations of statutory auditors and audit firms. When carrying out investigation, they can collaborate with the professional bodies of the auditors.
Amendment 250 #
Proposal for a regulation
Article 5
Article 5
Amendment 253 #
Proposal for a regulation
Article 6
Article 6
Amendment 256 #
Proposal for a regulation
Article 7
Article 7
Amendment 258 #
Proposal for a regulation
Article 8 – paragraph 1 – introductory part
Article 8 – paragraph 1 – introductory part
1. 1 A statutory auditor or a key audit partner who, three years preceding his dismissal or resignation, carries out a statutory audit of a public-interest entity on behalf of an audit firm shall not, before a period of at least two years has elapsed since he or she resigned or was dismissed as a statutory auditor or key audit partner from the audit engagement, take up any of the following duties:
Amendment 263 #
Proposal for a regulation
Article 9 – paragraph 2
Article 9 – paragraph 2
Amendment 271 #
Proposal for a regulation
Article 9 – paragraph 2 a (new)
Article 9 – paragraph 2 a (new)
2a. The contractual fees paid by the audited entity to the auditor or to the audit firm, as well as any amendments to these during the contractual term, shall be approved by the audit committee.
Amendment 279 #
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 and non-audit services pursuant to this Regulation.
Amendment 284 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 2
Article 10 – paragraph 1 – subparagraph 2
Amendment 289 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 2 a (new)
Article 10 – paragraph 1 – subparagraph 2 a (new)
The statutory auditor or the audit firm carrying out statutory audit of public- interest entities can provide to the audited entity, beside the statutory audit services, any-other of financial audit related services, to its parent undertaking or to its controlled undertakings.
Amendment 290 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 2 b (new)
Article 10 – paragraph 1 – subparagraph 2 b (new)
Member States should encourage engaging small and medium-size audit firms for auditing accounts of the public institutions and state owned companies.
Amendment 306 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 1
Article 10 – paragraph 3 – subparagraph 1
A statutory auditor or an audit firm carrying out statutory audit of public- interest entities shall not directly or indirectly provide to the audited entity, to its parent undertaking and to its controlled undertakings non-audit services, as laid down in paragraph 5 point a.
Amendment 309 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 1 a (new)
Article 10 – paragraph 3 – subparagraph 1 a (new)
A statutory auditor or an audit firm carrying out statutory audit of public- interest entities shall provide to the audited entity, to its parent undertaking or to its controlled undertakings non-audit services, as laid down in paragraph 5 p(b), only upon the approval of the Audit Committee.
Amendment 310 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 2
Article 10 – paragraph 3 – subparagraph 2
Amendment 318 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point i
Article 10 – paragraph 3 – subparagraph 3 – point a – point i
Amendment 326 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point iv
Article 10 – paragraph 3 – subparagraph 3 – point a – point iv
(iv) valuation services, providing fairness opinions or contribution-in-kind reports;
Amendment 359 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point b – point i a (new)
Article 10 – paragraph 3 – subparagraph 3 – point b – point i a (new)
(ia) audit non-related specialised services, fiscal consultancies, general management services and other consulting services;
Amendment 360 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point b – point ii
Article 10 – paragraph 3 – subparagraph 3 – point b – point ii
Amendment 362 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point b – point ii a (new)
Article 10 – paragraph 3 – subparagraph 3 – point b – point ii a (new)
(iia) fairness opinions
Amendment 367 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 a (new)
Article 10 – paragraph 3 – subparagraph 3 a (new)
The draw out conditions for reports on in -kind capital contribution, drawn up by a statutory auditor or an audit firm and provided to the audited entity, to its parent undertaking or to its controlled undertakings will be adopted through national regulations.
Amendment 369 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 4
Article 10 – paragraph 3 – subparagraph 4
Amendment 376 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 5
Article 10 – paragraph 3 – subparagraph 5
Amendment 385 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 3
Article 10 – paragraph 4 – subparagraph 3
Amendment 389 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 4
Article 10 – paragraph 4 – subparagraph 4
Amendment 392 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 5
Article 10 – paragraph 4 – subparagraph 5
Amendment 399 #
Proposal for a regulation
Article 10 – paragraph 5 – introductory part
Article 10 – paragraph 5 – introductory part
5. Where an audit firm generates more than one third of its annual audit revenues from large public-interest entities and belongs to a network whose members have combined annual audit revenues which exceed EUR 1 500 million within the European Union, it shallthe audit firm can provide non-audit services referred to in Art. 10 paragraph 5 point b to public interest entities if complyies with the following cumulative conditions:
Amendment 400 #
Proposal for a regulation
Article 10 – paragraph 5 – point a
Article 10 – paragraph 5 – point a
Amendment 401 #
Proposal for a regulation
Article 10 – paragraph 5 – point a a (new)
Article 10 – paragraph 5 – point a a (new)
(aa) during the first year of application of the present paragraph: (i) the non-audit services value provided to each public interest entity can not exceed 90% of the annual total audit fees paid by the public interest entity to the audit firm; (ii) the non-audit services value provided to public interest entities can not exceed 65% of the annual total income value for the audit firm, originated in payments from public interest entities;
Amendment 402 #
Proposal for a regulation
Article 10 – paragraph 5 – point b
Article 10 – paragraph 5 – point b
Amendment 403 #
Proposal for a regulation
Article 10 – paragraph 5 – point b a (new)
Article 10 – paragraph 5 – point b a (new)
(ba) during the second year of application of the present paragraph: (i) the non-audit services value provided to each public interest entity can not exceed 80% of the annual total audit fees paid by the public interest entity to the audit firm; (ii) the non-audit services value provided to public interest entities can not exceed 55% of the annual total income value for the audit firm, originated in payments from public interest entities;
Amendment 404 #
Proposal for a regulation
Article 10 – paragraph 5 – point c
Article 10 – paragraph 5 – point c
Amendment 405 #
Proposal for a regulation
Article 10 – paragraph 5 – point c a (new)
Article 10 – paragraph 5 – point c a (new)
(ca) during the third year of application of the present paragraph: (i) the non-audit services value provided to each public interest entity can not exceed 70% of the annual total audit fees paid by the public interest entity to the audit firm; (ii) the non-audit services value provided to public interest entities can not exceed 45% of the annual total income value for the audit firm, originated in payments from public interest entities;
Amendment 406 #
Proposal for a regulation
Article 10 – paragraph 5 – point d
Article 10 – paragraph 5 – point d
Amendment 407 #
Proposal for a regulation
Article 10 – paragraph 5 – point e
Article 10 – paragraph 5 – point e
Amendment 409 #
Proposal for a regulation
Article 10 – paragraph 6
Article 10 – paragraph 6
Amendment 414 #
Proposal for a regulation
Article 11
Article 11
Amendment 428 #
Proposal for a regulation
Article 19
Article 19
Amendment 431 #
Proposal for a regulation
Article 20 – paragraph 1
Article 20 – paragraph 1
The statutory auditor(s) or the audit firm(s) shall comply with the international auditing standards referred to in Article 26 of Directive 2006/43/EC when carrying out the statutory audit of public-interest entities as long as those standards are in conformity with the requirements of this Regulation.
Amendment 443 #
Proposal for a regulation
Article 22 – paragraph 2 – point f a (new)
Article 22 – paragraph 2 – point f a (new)
(fa) in support of the audit opinion on the true and fair view of annual or consolidated financial statements as a whole, as required in point (t), provide for each significant audit risk – as defined in accordance with the international standards on auditing referred to in Article 26 of Directive 2006/43/EC – information provided in audit report shall include the following: (i) a description of the most important assessed risks of material misstatement, including assessed risk(s) of material misstatement due to fraud; (ii) a summary of the auditor's response to those risks; and (iii) key observations from that audit work, if necessary; Where relevant to the above information provided in the audit report on each significant audit risk, a clear reference to the relevant disclosures in the financial statements shall be provided.
Amendment 477 #
Proposal for a regulation
Article 23 – paragraph 2 – point e a (new)
Article 23 – paragraph 2 – point e a (new)
Amendment 501 #
Proposal for a regulation
Article 25 – paragraph 1 – subparagraph 1 – introductory part
Article 25 – paragraph 1 – subparagraph 1 – introductory part
Without prejudice to Article 55 of Directive 2004/39/EC, Article 53 of Directive 2006/48/EC of the European Parliament and of the Council34 , Article 15(4) of Directive 2007/64/EC, Article 106 of Directive 2009/65/EC, the first paragraph of Article 3 of Directive 2009/110/EC and Article 72 of Directive 2009/138/EC of the European Parliament and of the Council35 , the statutory auditor or audit firm carrying out the statutory audit of a public-interest entity shall have a duty to report promptly to the competent authorities supervising public-interest entities any fact or decision concerning that public-interest entity of which he, she or it has become aware whilein the normal course of carrying out thate statutory audit and which is liable to bring about any of the following:
Amendment 502 #
Proposal for a regulation
Article 25 – paragraph 1 – subparagraph 2
Article 25 – paragraph 1 – subparagraph 2
The statutory auditor or the audit firm shall also have a duty to report any facts and decisinformations of which he, she or it becomes aware in the normal course of carrying out the statutory audit of an undertaking having close links with the public-interest entity for which he, she or it is also carrying out the statutory audit.
Amendment 509 #
Proposal for a regulation
Article 28 – paragraph 2 – point d – point ii
Article 28 – paragraph 2 – point d – point ii
(ii) the identity of the holders of any special control rights including multiple voting rights and a description of those rights, whether such rights results from the holding of any securities, by contract or otherwise;
Amendment 515 #
Proposal for a regulation
Article 31 – paragraph 1 – subparagraph 1
Article 31 – paragraph 1 – subparagraph 1
Each public-interest entity shall have an audit committee. The audit committee shall be composed of non-executive members of the administrative body and/or members of the supervisory body of the audited entity and/or members appointed by the general meeting of shareholders of the audited entity or, for entities without shareholders, by an equivalent body.
Amendment 516 #
Proposal for a regulation
Article 31 – paragraph 1 – subparagraph 2
Article 31 – paragraph 1 – subparagraph 2
At least onetwo members of the audit committee shall have competences in auditing and another member in accounting and/or auditing. The committee members as a whole shall have competence relevant to the sector in which the audited entity is opera, finance, taxation or accounting.
Amendment 521 #
Proposal for a regulation
Article 31 – paragraph 5 – point a
Article 31 – paragraph 5 – point a
(a) monitor financial reporting process and may submit recommendations or proposals to ensure its integrity;
Amendment 522 #
Proposal for a regulation
Article 31 – paragraph 5 – point b
Article 31 – paragraph 5 – point b
(b) monitor the effectiveness of the undertaking's internal control, internal audit where applicable, and risk management systems;, without breaching its independence.
Amendment 524 #
Proposal for a regulation
Article 31 – paragraph 5 – point c
Article 31 – paragraph 5 – point c
(c) monitor the statutory audit of the annual and consolidated financial statements and supervise the completeness and integrity ofreceives the draft audit reports in accordance with Articles 22 to 23;
Amendment 525 #
Proposal for a regulation
Article 31 – paragraph 5 – point d
Article 31 – paragraph 5 – point d
(d) review and monitor the independence of the statutory auditors(s) or audit firms(s) in accordance with Articles 5 to 11, and in particular the provision of additional services to the audited entity in accordance with Article 10;
Amendment 526 #
Proposal for a regulation
Article 31 – paragraph 5 – point d a (new)
Article 31 – paragraph 5 – point d a (new)
(d a) review that there is a complete separation between the internal audit and the statutory audit;
Amendment 537 #
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 one of the invited auditors or firms is not oneinvitation should not preclude in any way that firms who received moreless than 15% of the total audit fees from large public-interest entities in the Member State concerned in the previous calendar year;, to participate in the selection procedure.
Amendment 540 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – point a a (new)
Article 32 – paragraph 3 – subparagraph 1 – point a a (new)
(a a) If no auditor or audit firm that participate in the selection procedure can fulfil the condition laid down in paragraph 3 point a the audited entity shall continue the selection procedure with respect of paragraph 3 point b and the following.
Amendment 550 #
Proposal for a regulation
Article 32 – paragraph 4
Article 32 – paragraph 4
4. Public-interest entities which meet the criteria set out in points (f) and (t) of Article 2(1) of Directive 2003/71/EC, cooperatives within the meaning of Article 2 (14) of Directive 2006/43/EC, a savings bank or a similar entity as referred to in Article 45 of the Directive 86/635/EEC shall not be required to apply the selection procedure referred to in paragraph 4.
Amendment 570 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 2
Article 33 – paragraph 1 – subparagraph 2
The public-interest entity may renew this engagement only once.
Amendment 577 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 3
Article 33 – paragraph 1 – subparagraph 3
Amendment 589 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 4
Article 33 – paragraph 1 – subparagraph 4
Amendment 602 #
Proposal for a regulation
Article 33 – paragraph 2
Article 33 – paragraph 2
Amendment 610 #
Proposal for a regulation
Article 33 – paragraph 3
Article 33 – paragraph 3
Amendment 619 #
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 gradual rotation mechanism with regard to the key audit most senior personnels 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. Such phase cannot exceed 7 years for the key audit partners and a minimum of 3 years must elapse between phases.
Amendment 622 #
Proposal for a regulation
Article 33 – paragraph 5 – subparagraph 2
Article 33 – paragraph 5 – subparagraph 2
Amendment 624 #
Proposal for a regulation
Article 33 – paragraph 5 – subparagraph 3
Article 33 – paragraph 5 – subparagraph 3
Amendment 625 #
Proposal for a regulation
Article 33 – paragraph 6 – subparagraph 1
Article 33 – paragraph 6 – subparagraph 1
Amendment 629 #
Proposal for a regulation
Article 33 – paragraph 6 – subparagraph 2
Article 33 – paragraph 6 – subparagraph 2
Amendment 631 #
Proposal for a regulation
Article 34 – paragraph 2 – subparagraph 1
Article 34 – paragraph 2 – subparagraph 1
The audit committee, one or more shareholders representing together or separately at least 5% of the voting rights, the competent authorities referred to in Article 35(1) or 35(2) shall be able to bring a claim before a national court for the dismissal of the statutory auditor(s) or audit firm(s) where there are proper grounds.
Amendment 650 #
Proposal for a regulation
Article 36 – paragraph 3 a (new)
Article 36 – paragraph 3 a (new)
The competent authorities can not interfere with the professional body of auditors, safe for the tasks delegated pursuant Article 36 paragraph 3 point (b) (new).
Amendment 651 #
Proposal for a regulation
Article 36 – paragraph 3 b (new)
Article 36 – paragraph 3 b (new)
The competent authorities may delegate certain tasks to a professional body of auditors.
Amendment 652 #
Proposal for a regulation
Article 36 – paragraph 3 c (new)
Article 36 – paragraph 3 c (new)
In all circumstances the competent authorities could not receive funds from the auditors or from their professional bodies.
Amendment 660 #
Proposal for a regulation
Article 38 – paragraph 3 – subparagraph 1 – point d
Article 38 – paragraph 3 – subparagraph 1 – point d
Amendment 665 #
Proposal for a regulation
Article 40 – paragraph 4 – subparagraph 2 – point b a (new)
Article 40 – paragraph 4 – subparagraph 2 – point b a (new)
(b a) partners or a senior managers of audit firms or independent auditors, who joined a competent authority in any position, should, in the first three years, refrain from deciding or to be in any way involved in a decision regarding either the audit firm they previously worked for or the companies audited by them in the two years preceding their joining of the competent authority.
Amendment 666 #
Proposal for a regulation
Article 40 – paragraph 4 – subparagraph 2 – point c
Article 40 – paragraph 4 – subparagraph 2 – point c
(c) a person shall not be allowed to act as an inspector in an inspection of the statutory auditor or audit firm until at least two years have elapsed since that person ceased to be a partner or employee of that auditor or in that audit firm or to be otherwise associated therewith;
Amendment 670 #
Proposal for a regulation
Article 42 – paragraph 2 – subparagraph 1
Article 42 – paragraph 2 – subparagraph 1
By X X 20XX [23 years after the entry into force of the Regulation], and at least on a two-year basis thereafter, each competent authority shall draw up a report on this issue and submit it to ESMA, EBA and EIOPA.