39 Amendments of Cecilia WIKSTRÖM related to 2011/0359(COD)
Amendment 205 #
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. The provision ofsafeguards in the form of a prohibition of certain 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. Asthe statutory auditor cannot perform to their audited entities, as well as 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 and are not allowed to undertake other services unconnected to their statutory audit function such as consultancy or advisory services- tendering, at the behest of the audit committee, of any non-audit service and financial audit related services above a 30% threshold.
Amendment 212 #
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 one member of the committee has competence in auditing and another one in auditing and/or accounting. Members of the audit committee should take part in skill enhancement programmes to ensure an appropriate level of technical knowledge to fulfil their roles. 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 227 #
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. AFurthermore, a comprehensive, transparent and independent evaluation of audit quality should be regularly and appropriately documented. This comprehensive assessment should form the basis for the annual auditor selection by the general assembly. The purpose of mandatory tendering for the audit engagement is to not only evaluate the incumbent provider's performance but also the requirements of the audited entity. Furthermore, 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 234 #
Proposal for a regulation
Recital 36 a (new)
Recital 36 a (new)
(36a) The Proposal for a Regulation of the European Parliament and of the Council on specific requirements regarding statutory audit of public- interest entities envisages that the EU- wide cooperation between competent authorities in respect of the activities of statutory auditors and audit firms that audit the financial statements of public- interest entities would take place within ESMA. ESMA would thus take over the EU-wide cooperation mechanism that currently takes place under the aegis of the European Group of Auditors' Oversight Bodies (EGAOB), an expert group established and chaired by the European Commission. ESMA should create a standing committee composed of the competent authorities and supervisors of auditors. However, auditor public oversight would continue to be carried out at national level. ESMA would be best placed to fulfil the new tasks according to this Regulation in order to ensure an effective and operational cooperation at EU level. An EU-wide cooperation on auditor supervision within ESMA would benefit from the experience and resources of ESMA, as they are already working in the field of auditing regarding public-interest entities under the auspices of the Corporate Reporting Standing Committee. Under this new structure within ESMA, Member States will be sufficiently represented and will be an integral part of the decision-making process. The Commission, shall after a transitional period, report back to the European Parliament and the Council with a report on the function of ESMA regarding coordination of European audit supervision and their future role in this regard. The Commission shall evaluate ESMA has enough resources to fulfil its tasks laid down in this Regulation and propose budget increases if necessary.
Amendment 294 #
Proposal for a regulation
Article 10 – paragraph 2 – point e a (new)
Article 10 – paragraph 2 – point e a (new)
(ea) auditing technology systems and risk management procedures related to the preparation and/or control of financial information included in the financial statements and advice on risk;
Amendment 296 #
Proposal for a regulation
Article 10 – paragraph 2 – point e b (new)
Article 10 – paragraph 2 – point e b (new)
(eb) audit of occupational pension schemes and pension obligations;
Amendment 299 #
Proposal for a regulation
Article 10 – paragraph 2 – point f
Article 10 – paragraph 2 – point f
(f) any other statutory duty related to audit work imposed by Union legislaw or regulation to the statutory auditor or audit firm.
Amendment 308 #
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 prohibited non-audit services.
Amendment 312 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 2
Article 10 – paragraph 3 – subparagraph 2
Where the statutory auditor belongs to a network, no member of such network shall provide to the audited entity, to its parent undertaking and to its controlled undertakings within the Union any prohibited non- audit services.
Amendment 316 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – introductory part
Article 10 – paragraph 3 – subparagraph 3 – introductory part
For the purposes of this Article, prohibited non-audit services shall mean:
Amendment 321 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point ii
Article 10 – paragraph 3 – subparagraph 3 – point a – point ii
(ii) bookkeeping services including the calculations of current and deferred taxes and preparing accounting records and financial statements as well as financial information;
Amendment 323 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point iii
Article 10 – paragraph 3 – subparagraph 3 – point a – point iii
(iii) designing andor implementing internal control or, risk management procedureor financial information technology systems related to the preparation and/or control of financingal information included in the financial statements and advice on risk;
Amendment 328 #
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 330 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point iv a (new)
Article 10 – paragraph 3 – subparagraph 3 – point a – point iv a (new)
(iva) generate information that is significant to the accounting records or financial statements that are subject to the statutory audit;
Amendment 332 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point vi
Article 10 – paragraph 3 – subparagraph 3 – point a – point vi
Amendment 338 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point vii a (new)
Article 10 – paragraph 3 – subparagraph 3 – point a – point vii a (new)
(viia) payroll services;
Amendment 343 #
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) human resources and/or recruitment services, including searching for and seeking out candidates for personnel positions within the audited entity;
Amendment 347 #
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) legal and tax services that go beyond the presentation of alternatives; tax services for natural persons with a significant role in the financial reporting of the audited entity and the marketing of tax planning concepts;
Amendment 350 #
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)
(viiic) promoting, dealing in, or underwriting client shares;
Amendment 352 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point viii d (new)
Article 10 – paragraph 3 – subparagraph 3 – point a – point viii d (new)
(viiid) providing comfort letters for investors in the context of the issuance of an undertaking's securities;
Amendment 354 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point b
Article 10 – paragraph 3 – subparagraph 3 – point b
Amendment 373 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 4
Article 10 – paragraph 3 – subparagraph 4
Amendment 380 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 5
Article 10 – paragraph 3 – subparagraph 5
Amendment 397 #
Proposal for a regulation
Article 10 – paragraph 5
Article 10 – paragraph 5
Amendment 413 #
Proposal for a regulation
Article 10 a (new)
Article 10 a (new)
Article 10a Tender of non-audit services 1. Related financial audit services enumerated in Article 10 (2) that would increase the ratio of non-audit to audit fees to more than 30% and non-audit related services must be subject to an open and transparent tendering procedure, if the designated audit committee feels it is necessary. If the audit committee does not feel it is necessary, it should explain why to the competent authority. 2. The tendering procedure referred to in Paragraph 1 shall be designed by the audit committee and approved by the competent authority. When designing their non-audit service policies, audit committees must: (a) aim for the greatest possible transparency; (b) give due consideration to small and medium-sized service providers; (c) ensure involvement of shareholders in the provision of non-audit services, in particular the audit committee shall receive an annual approval of the audited entities policy for non-audit services. 3. The selection procedure for those non- audit services referred to in paragraph 1 shall respect the following criteria: (a) the audit committee shall be free to invite any statutory auditors, audit firms or non-audit service providers to submit proposals for the provision of non-audit services; (b) tender documents shall be prepared by the audit committee, which should contain transparent and non- discriminatory selection criteria that shall be used to evaluate the proposals made by statutory auditor(s), audit firm(s), or non- audit service provider(s); (c) where, in accordance with national Union law, the competent authorities referred to in Article 35, require statutory auditors, audit firms and non-audit service providers should comply with certain quality standards, those standards shall be included in the tender documents; (d) the audit committee shall evaluate the proposals made by the statutory auditors, audit firms or non-audit service providers in accordance with the selection criteria predefined in the tender documents; (e) the audit committee shall be able to demonstrate to the competent authority referred to in Article 35 that the selection procedure was conducted in a fair manner.
Amendment 456 #
Proposal for a regulation
Article 22 – paragraph 4
Article 22 – paragraph 4
Amendment 476 #
Proposal for a regulation
Article 23 – paragraph 2 – point e
Article 23 – paragraph 2 – point e
(e) describe the distribution of tasks among the statutory auditor(s)s and/or the audit firm(s) and include a description of the scope and timing of the audit and significant findings from the statutory audit conducted. This should include any significant deficiencies in the internal control system of the audited entity; how they addressed significant difficulties encountered during the audit and other matters arising from the statutory audit that in the statutory auditor's or audit firm's professional judgment are significant to the financial reporting process;
Amendment 520 #
Proposal for a regulation
Article 31 – paragraph 1 – subparagraph 3 a (new)
Article 31 – paragraph 1 – subparagraph 3 a (new)
Members of the audit committee shall take part in skill enhancement programmes in order to ensure an adequate technical knowledge level to fulfil their tasks.
Amendment 536 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – introductory part
Article 32 – paragraph 3 – subparagraph 1 – introductory part
Amendment 539 #
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 is free 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 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 543 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – point c
Article 32 – paragraph 3 – subparagraph 1 – point c
(c) the audited entity committee shall prepare tender documents to the intention of the invited statutory auditor(s) or audit firm(s). Those tender documents shall allow the audit firm to understand the business of the audited entity and the type of statutory audit that is to be carried out. The tender documents shall contain transparent and non- discriminatory selection criteria that shall be used by the audited entity committee to evaluate the proposals made by statutory auditors or audit firms;
Amendment 544 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – point d
Article 32 – paragraph 3 – subparagraph 1 – point d
(d) the audited entity committee shall be free to define the selection procedure and may conduct direct negotiations with interested tenderers in the course of the procedure;
Amendment 545 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – point f
Article 32 – paragraph 3 – subparagraph 1 – point f
(f) the audit committeed entity shall evaluateperform a comprehensive assessment of the proposals made by the statutory auditors or audit firms in accordance with the selection criteria predefined in the tender documents. The audited entity shall prepare a report on the conclusions of the selection procedure, which shall be validated by the audit committee. The audited entity and the audit committee shall take into consideration any inspection report on the applicant statutory auditor or audit firm referred to in Article 40(6) and published by the competent authority pursuant to Article 44(d);
Amendment 546 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – point g
Article 32 – paragraph 3 – subparagraph 1 – point g
(g) the audited entity committee shall be able to demonstrate to the competent authority referred to in Article 35 that the selection procedure was conducted in a fair manner.
Amendment 547 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 2
Article 32 – paragraph 3 – subparagraph 2
Amendment 572 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 2
Article 33 – paragraph 1 – subparagraph 2
The public-interest entity may renew thise audit engagement only once, provided this is based on a proposal of the audit committee after a re-tendering process has taken place. Shareholders at the annual general meeting shall formally approve the statutory auditor(s) engagement.
Amendment 585 #
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 614 years. At least one re-rendering process shall take place during this 14 year period.
Amendment 592 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 4
Article 33 – paragraph 1 – subparagraph 4
Amendment 614 #
Proposal for a regulation
Article 33 – paragraph 3
Article 33 – paragraph 3