65 Amendments of Jürgen CREUTZMANN related to 2011/0359(COD)
Amendment 97 #
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 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 either 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 or they partner with other audit firms in joint audits if they want to further expand their business activities.
Amendment 101 #
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. It should equally provide reasons if it proposes to renew an audit engagement following a tender procedure. The recommendation of the audit committee should include at least two possible choices for the audit engagement, a comprehensive assessment of both proposals, 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 selectiontender procedure organised by the audited entity, under the responsibility of the audit committee. In such selectiontender procedure, the audited entity should invite statutorypublish a call to auditors or audit firms, including smaller 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 selectiontender 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 104 #
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. 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 auditorFurthermore, a comprehensive, transparent and independent evaluation of audit quality should be regularly and appropriately documented. This comprehensive evaluation should form the basis for the auditor selection by the general meeting, which follows a tender procedure at least every 7 years. Furthermore, an appropriate gradual rotation mechanism should 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.
Amendment 105 #
Proposal for a regulation
Recital 43
Recital 43
(43) In order to take account of developments in auditing and the audit market, the Commission should be empowered to specify technical requirements on the content of the handover file that the new statutory auditor or audit firm should receive and on the establishment of a European quality certificate for statutory auditors and audit firms carrying out statutory audits of public-interest entities.
Amendment 119 #
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 122 #
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, whereas revenues from audits for which more than one audit firm has been appointed shall not be factored in the calculation of these thresholds, it shall comply with the following conditions:
Amendment 136 #
Proposal for a regulation
Article 32 – paragraph 3 – subparagraph 1 – introductory part
Article 32 – paragraph 3 – subparagraph 1 – introductory part
3. Unless it concerns the renewal of anWhenever the audited engagement in accordance with the second subparagraph of Article 33(1)tity decides so, but at the latest after 7 years of renewed audit engagements, the recommendation of the audit committee referred to in paragraph 2 of this Article, shall be prepared following a selectiontender procedure organized by the audited entity respecting the following criteria:
Amendment 140 #
Proposal for a regulation
Recital 43
Recital 43
(43) In order to take account of developments in auditing and the audit market, the Commission should be empowered to specify technical requirements on the content of the handover file that the new statutory auditor or audit firm should receive and on the establishment of a European quality certificate for statutory auditors and audit firms carrying out statutory audits of public-interest entities.
Amendment 144 #
Proposal for a regulation
Article 32 – paragraph 5 – subparagraph 2
Article 32 – paragraph 5 – subparagraph 2
If the proposal of the administrative or supervisory board departs from the recommendation of the audit committee, the proposal shall justify the reasons for not following the recommendation of the audit committee. It shall equally justify the reasons if, following a tender procedure referred to in paragraph 3, the renewal of an audit engagement is proposed.
Amendment 145 #
Proposal for a regulation
Article 32 – paragraph 6 – subparagraph 1
Article 32 – paragraph 6 – subparagraph 1
6. In the case of a credit institution or insurance undertaking, tThe administrative or supervisory board shall submit its draft proposal to the competent authority referred to in Article 35(2).The draft proposal shall be accompanied by the results of the comprehensive assessment referred to in Article 32 (2) and (3). The competent authority referred to in Article 35(2) shall have the right to veto the choice proposed in the recommendation. Any such opposition shall be duly justified.
Amendment 149 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 1
Article 33 – paragraph 1 – subparagraph 1
1. The public-interest entity shall appoint a statutory auditor or audit firm for an initial engagement that shall not be shorter than twohree years.
Amendment 151 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 2
Article 33 – paragraph 1 – subparagraph 2
The public-interest entity may renew this engagement up to a maximum duration of combined, consecutive engagements only oncef 14 years providing these renewals are each based on proposals of the audit committee and approved at the annual general meeting.
Amendment 153 #
Proposal for a regulation
Article 5 – paragraph 1
Article 5 – paragraph 1
A statutory auditor or audit firm shall take all necessary steps to ensure that the carrying outindependence of athe statutory auditor ofr a public-interest entity is not affected by any existing or potential conflict of interest or businessudit firm carrying out the statutory audit is not compromised by financial, personal, business, employment or other relationships involving the statutory auditor or, the audit firm carrying out the statutory audit and, where appropriate, its, its affiliate firms and network, managers, auditors, employees, any other natural persons whose services are placed at the disposal or under the control of the statutory auditor or audit firm, or any person directly or indirectly linked tod any natural person in a position to influence the outcome of the statutory auditor or audit firm by control.
Amendment 157 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 3
Article 33 – paragraph 1 – subparagraph 3
Amendment 161 #
Proposal for a regulation
Article 9 – paragraph 2
Article 9 – paragraph 2
Amendment 171 #
Proposal for a regulation
Article 33 – paragraph 6
Article 33 – paragraph 6
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 272 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 5
Article 10 – paragraph 3 – subparagraph 5
Amendment 278 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 3
Article 10 – paragraph 4 – subparagraph 3
Being involved in the decision-taking of the audited entity and the provision of the services referred to in points (ii) and (iii) of paragraph 3(a)non- audit services shall be considered as affecting such independence in all cases.
Amendment 280 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 4
Article 10 – paragraph 4 – subparagraph 4
Amendment 283 #
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 other assurance services, subject to prior approval of the audit committee and as long as these services do not pose a threat to independence that cannot be reduced to an acceptable level by the application of safeguards.
Amendment 288 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 2
Article 10 – paragraph 1 – subparagraph 2
Where the statutory auditor belongs to a network, a member of such network may provide to the audited entity, to its parent undertaking and to its controlled undertakings within the Union statutory audit services or, related financial audit services and other assurance services, subject to prior approval of the audit committee and as long as these services do not pose a threat to independence that cannot be reduced to an acceptable level by the application of safeguards.
Amendment 292 #
Proposal for a regulation
Article 10 – paragraph 2 – introductory part
Article 10 – paragraph 2 – introductory part
2. For the purposes of this Article, related financial audit services shall meanand other assurance services shall mean in particular:
Amendment 293 #
Proposal for a regulation
Article 10 – paragraph 2 – point e
Article 10 – paragraph 2 – point e
(e) providing certification on compliance with tax requirements where such attestation is required by national law, preparation of tax declarations, advice on indirect taxes, payroll tax, transfer prices, customs duties and public support measures, support regarding tax inspections and tax authority enquiries;
Amendment 295 #
Proposal for a regulation
Article 10 – paragraph 2 – point e a (new)
Article 10 – paragraph 2 – point e a (new)
(ea) auditing technology systems, internal control or risk management procedure related to the preparation and/or control of financing information included in the financial statements and advice on risk;
Amendment 297 #
Proposal for a regulation
Article 10 – paragraph 2 – point e b (new)
Article 10 – paragraph 2 – point e b (new)
(eb) providing assurance on the implementation and further development of electronic data processing systems;
Amendment 298 #
Proposal for a regulation
Article 10 – paragraph 2 – point e c (new)
Article 10 – paragraph 2 – point e c (new)
(ec) audit of occupational pension schemes and pension obligations;
Amendment 300 #
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 and/or national legislation to the statutory auditor or audit firm.;
Amendment 303 #
Proposal for a regulation
Article 10 – paragraph 2 – point f a (new)
Article 10 – paragraph 2 – point f a (new)
(fa) providing comfort letters for investors in the context of the issuance of an undertaking's securities and fairness opinions or contribution-in-kind reports.
Amendment 317 #
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, non-audit services shall mean in particular:
Amendment 324 #
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 technology systems and internal control or risk management procedure related to the preparation and/or control of financing information included in the financial statements and advice on risk;
Amendment 329 #
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 337 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point a – point vi
Article 10 – paragraph 3 – subparagraph 3 – point a – point vi
(vi) designing andor implementing financial information technology systems for public- interest entities as referred to in Article 2(13)(b) to (j) of Directive 2006/43/EC;
Amendment 344 #
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 services, including recruiting senior management;
Amendment 347 #
Proposal for a regulation
Article 25 – paragraph 1 – subparagraph 1 – introductory part
Article 25 – paragraph 1 – subparagraph 1 – introductory part
Amendment 348 #
Proposal for a regulation
Article 25 – paragraph 1 – subparagraph 1 – point c
Article 25 – paragraph 1 – subparagraph 1 – point c
(c) a refusal to certify the financial statements or the expression of reservatissue an audit report or the issuance of an adverse or a qualified audit opinions.
Amendment 348 #
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;
Amendment 349 #
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 decisions according to paragraph 1 (a), (b) or (c) of which he, she or it becomes aware in the course of carrying out thea statutory audit of an undertaking having close links withcontrolled by the public-interest entity for which he, she or it is also carrying out the statutory audit. The audit committee, administrative and supervisory body will undertake appropriate steps to immediately inform the competent authorities supervising public interest entities about these reported facts and decisions.
Amendment 355 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 3 – point b
Article 10 – paragraph 3 – subparagraph 3 – point b
Amendment 357 #
Proposal for a regulation
Article 26 – paragraph 2 – subparagraph 1
Article 26 – paragraph 2 – subparagraph 1
The annual financial report and the annual income statement shall show the total turnover divided into fees from the statutory audit of annual and consolidated financial statements of public-interest entities and entities belonging to a group of undertakings whose parent undertaking is a public-interest entity, fees from the statutory audit of annual and consolidated financial statements of other entities and fees charged for audit-related financialand other assurance audit services as defined in Article 10(2).
Amendment 367 #
Proposal for a regulation
Article 31 – paragraph 1 – subparagraph 3 a (new)
Article 31 – paragraph 1 – subparagraph 3 a (new)
(3a) 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 374 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 4
Article 10 – paragraph 3 – subparagraph 4
Amendment 381 #
Proposal for a regulation
Article 10 – paragraph 3 – subparagraph 5
Article 10 – paragraph 3 – subparagraph 5
Amendment 383 #
Proposal for a regulation
Article 32 – paragraph 2 – subparagraph 4
Article 32 – paragraph 2 – subparagraph 4
The comprehensive assessment shall be performed in a transparent and systematic approach, and shall include the consideration of professional competencies of the auditor or audit firm which are necessary to perform the statutory audit in compliance with relevant ethical requirements and international standards on auditing referred to in Article 20. It shall 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 its recommendation, the audit committee shall state that its recommendation is free from influence by a third party and that no contractual clause as referred to in paragraph 7 has been imposed upon it.
Amendment 388 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 3
Article 10 – paragraph 4 – subparagraph 3
Being involved in the decision-taking of the audited entity and the provision of the services referred to in points (ii) and (iii) of paragraph 3(a)non- audit services shall be considered as affecting such independence in all cases.
Amendment 391 #
Proposal for a regulation
Article 10 – paragraph 4 – subparagraph 4
Article 10 – paragraph 4 – subparagraph 4
Amendment 397 #
Proposal for a regulation
Article 10 – paragraph 5
Article 10 – paragraph 5
Amendment 398 #
Proposal for a regulation
Article 10 – paragraph 5
Article 10 – paragraph 5
Amendment 417 #
Proposal for a regulation
Article 33 – paragraph 1 – subparagraph 1
Article 33 – paragraph 1 – subparagraph 1
The public-interest entity shall appoint a statutory auditor or audit firm for an initial engagement that shall not be shorter than twohree years.
Amendment 456 #
Proposal for a regulation
Article 22 – paragraph 4
Article 22 – paragraph 4
Amendment 467 #
Proposal for a regulation
Article 33 – paragraph 5 – subparagraph 1
Article 33 – paragraph 5 – subparagraph 1
Where a statutory auditor or audit firm is replaced by another statutory auditor or audit firm, the former statutory auditor or audit firm shall provide the incoming statutory auditor or audit firm with a handover file. Such file shall include relevant information concerning the audited entity as may reasonably be necessary to understand the nature of the business and the internal organisation of the audited entity and to ensure the continuity of the statutory audit and the comparability with the audits carried out in previous yearscomply with the requirements contained in Article 23(3) of Directive 2006/43/EC.
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