Procedure completed
2011/0359(COD) Statutory audit of public-interest entities: specific requirements
Lead committee dossier: JURI/7/08135
Legal Basis TFEU 114-p1
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Opinion | ECON | SWINBURNE Kay (ECR) | |
| Opinion | IMCO | ||
| Opinion | ITRE | CREUTZMANN Jürgen (ALDE) | |
| Lead | JURI | KARIM Sajjad (ECR) | BODU Sebastian Valentin (PPE), MASIP HIDALGO Antonio (S&D), THEIN Alexandra (ALDE), LICHTENBERGER Eva (Verts/ALE), MAŠTÁLKA Jiří (GUE/NGL) |
Legal Basis TFEU 114-p1
Subjects
Activites
- 2014/05/27 Final act published in Official Journal
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2014/04/16
Final act signed
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2014/04/16
End of procedure in Parliament
- #3308
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2014/04/14
Council Meeting
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2014/04/14
Act adopted by Council after Parliament's 1st reading
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2014/04/03
Decision by Parliament, 1st reading/single reading
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T7-0283/2014
summary
The European Parliament adopted by 332 votes to 253, with 26 abstentions a legislative resolution on the proposal for a regulation of the European Parliament and of the Council on specific requirements regarding statutory audit of public-interest entities. Parliament adopted its position at first reading following the ordinary legislative procedure. The amendments adopted in plenary are the result of an agreement negotiated between the European Parliament and the Council. They amend the proposal as follows: Subject matter and scope: the Regulation lays down requirements (i) for the carrying out of the statutory audit of annual and consolidated financial statements of public-interest entities, (ii) rules on the organisation and selection of statutory auditors and audit firms by public-interest entities to promote their independence and the avoidance of conflicts of interest and (iii) rules on the supervision of compliance by statutory auditors and audit firms with those requirements. Parliament stipulated that where a cooperative or a savings bank or a similar entity is required or permitted under national provisions to be a member of a non-profit-making auditing entity, the Member State may decide that this Regulation should not apply to the statutory audit of such entity, provided that the principles of independence are complied with. Prohibition to provide services other than auditing: the provision of certain services other than statutory audit (non-audit services) to audited entities by statutory auditors, audit firms or members of their networks may compromise their independence. Therefore, it is appropriate to prohibit the provision of certain non-audit services such as specific tax, consultancy and advisory services to the audited entity, to its parent undertaking and to its controlled undertakings within the Union. Services linked to the financing, capital structure and allocation, and investment strategy of the audited entity should, in principle, be prohibited. Member States may decide to allow the statutory auditors and the audit firms to provide certain tax and valuation services when such services are immaterial or have no direct effect, separately or in the aggregate, on the audited financial statements. Where such services involve aggressive tax planning, they should not be considered as immaterial. Accordingly, a statutory auditor or an audit firm should not provide such services to the audited entity. An audit firm should be able to provide non-audit services which are not prohibited under this Regulation: · if the provision of those services has been approved in advance by the audit committee and · if the statutory auditor or the audit firm has satisfied itself that provision of those services does not pose a threat to the independence of the statutory auditor or the audit firm that cannot be reduced to an acceptable level by the application of safeguards. Member States may establish stricter rules setting out the conditions under which an audit firm may provide other than the prohibited non-audit services referred to in the Regulation. Audit fees: when an audit firm provides services other than auditing, the total fees for these services should be limited to no more than 70% of the average of the fees paid in the last three consecutive financial years for the statutory audit(s) of the audited entity and, where applicable, of its parent undertaking, of its controlled undertakings and of the consolidated financial statements of that group of undertakings. Audit report: Parliament and the Council laid down the aspects that need to be included in the audit report. Among other things, the report should: · state by whom or by which body the statutory auditor(s) or the audit firm(s) was (were) appointed; · indicate the date of the appointment and the period of total uninterrupted engagement including previous renewals and reappointments of the statutory auditors or the audit firms; · provide, in support of the audit opinion, the following: (i) a description of the most significant assessed risks of material mis-statement, including assessed risks of material misstatement due to fraud; (ii) a summary of the auditor's response to those risks; and where relevant, key observations arising with respect to those risks; · indicate any services, in addition to the statutory audit, which were provided by the statutory auditor or the audit firm to the audited entity and its controlled undertaking(s), and which have not been disclosed in the management report or financial statements. Additional report to the audit committee: this should include a description of the scope and timing of the audit, and detailed information on the significant findings from the statutory audit. This report should be submitted to the audit committee by the same deadline as the audit report. Upon request, the statutory auditor or an audit firm should discuss key matters arising from the statutory audit, referred to in the additional report. In addition, upon request, and in accordance with national law, the statutory auditors or the audit firms should make available without delay the additional report to the competent authorities. Appointment of statutory auditors or audit firms: to strengthen the independence of the audit firm, the audited entity would be free to invite any audit form to make an offer to provide the statutory audit service. However, the organisation of the tender process does not in any way preclude the participation in the selection procedure of firms which received less than 15% of the total audit fees from public-interest entities in the Member State concerned in the previous calendar year. Duration of the audit engagement: a public-interest entity should appoint a statutory auditor or an audit firm for an initial engagement of at least one year. The engagement may be renewed but neither the initial engagement of a particular statutory auditor or audit firm, nor this in combination with any renewed engagements therewith should exceed a maximum duration of 10 years. This period may be increased to 20 years in total where a public tendering process for the statutory audit is conducted, or to 24 years, where more than one statutory auditor or audit firm is simultaneously engaged – when a business is audited by at least two audit firms. The maximum durations referred should be extended only if, upon a recommendation of the audit committee, the administrative or supervisory body, proposes to the general meeting of shareholders or members, that the engagement be renewed and that proposal is approved. Delegation of tasks: according to the amended text, the Member States should be able to delegate or allow their competent authorities to delegate any of the tasks required to be undertaken to other authorities or bodies designated or otherwise authorised by law to carry out such tasks, except for tasks related to the quality assurance system, investigations and sanctions. Member States may, however, decide to delegate the tasks relating to systems of sanctions to other authorities or bodies designated or otherwise authorised by law to carry out such tasks, when the majority of the persons involved in the governance of the authority or body concerned is independent from the audit profession. Cooperation with other competent authorities at national level: this should be organised within the framework of a Committee of European Auditing Oversight Bodies (CEAOB), which should be composed of high-level representatives of the competent authorities and a member appointed by the European Securities and Markets Authority (ESMA).
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T7-0283/2014
summary
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2013/08/29
Committee report tabled for plenary, 1st reading/single reading
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A7-0177/2013
summary
The Committee on Legal Affairs adopted the report by Sajjad KARIM (ECR, UK) on the proposal for a regulation of the European Parliament and of the Council on specific requirements regarding statutory audit of public-interest entities. The Committee on Economic and Monetary Affairs, exercising its prerogatives as an associated committee under Parliament’s Rule 50 of the Rules of Procedure, also gave an opinion on the report. The committee recommended that Parliament’s position adopted at first reading following the ordinary legislative procedure should amend the Commission proposal as follows: Independence and objectivity: Members sought to ensure that the independence of the statutory auditor or audit firm carrying out the statutory audit is not compromised by financial, personal, business, employment or other relationships involving the statutory auditor, the audit firm, its network, or any natural person in a position to directly or indirectly influence the outcome of the statutory audit. Supply of non-audit services: according to the amended text, an audit firm may provide other assurance services, tax advisory services and other non-audit services other than prohibited non-audit services where: the provision of those services has been approved by the audit committee; the audit firm is itself satisfied that the provision of those services does not pose a threat to the independence of the statutory auditor or audit firm that cannot be reduced to an acceptable level by the application of safeguards. Where the statutory auditor or audit firm belongs to a network and services are provided to undertakings outside the Union which are controlled by the audited entity, the statutory auditor or audit firm shall assess whether his, her or its independence could be compromised by the provision of such services. Audit report: the statutory auditor or the audit firm should present the results of the statutory audit of the public-interest entity in an audit report prepared in accordance with the international auditing standards. The report should, inter alia: identify the title of each financial statement included in the annual or consolidated financial statements of the individual entity or consolidated group and state the date of, or the period covered by, each financial statement; express an opinion on whether the management report is consistent with the financial statements for the same financial year or whether it has been prepared in accordance with the applicable legal requirements; state whether the statutory auditor or audit firm has identified material misstatements in the management report, and give an indication of the nature of any such misstatements; provide: (i) a description of the most important assessed risks of material misstatement, including assessed risks of material misstatement due to fraud; (ii) a summary of the auditor's response to those risks; and (iii) key observations arising from the audit work; provide where relevant to the above information provided in the audit report concerning each significant audit risk, a clear reference to the relevant disclosures in the financial statements shall be provided; identify any breach of accounting or legal requirements that are significant to the governance of the entity or to its continued operation. Additional report: this should include a description of the scope and timing of the audit, and detailed information on the significant findings from the statutory audit. Report to supervisors of public-interest entities: at least once a year, the European Systemic Risk Board (ESRB) should organise a meeting with the statutory auditors and audit firms or networks carrying out the statutory audit of any FSB-identified systemically important financial institutions in order to inform the ESRB of sectoral or any significant developments in those systemically important financial institutions. Appointment of the statutory auditors or audit firms: the audited entity should 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 the organisation of the tender process does not in any way preclude the participation in the selection procedure of firms who received less than 15 % of the total audit fees from public-interest entities in the Member State concerned in the previous calendar year. The public-interest entity should appoint a statutory auditor or audit firm for an initial engagement of at least one year. Member States should ensure that the maximum duration of the combined engagements does not exceed 14 years (the European Commission proposed that the public-interest entity may renew this engagement only once and that the maximum duration of the combined two engagements should not exceed 6 years). By way of derogation, Member States may provide for the maximum duration to recommence if for instance a public tendering process for the statutory audit is conducted. Where one or more derogations are applied the total duration of the audit engagement period shall not exceed 25 years. Penalties: Member States should ensure, in conformity with their national law, that at least the appropriate administrative sanctions and/or measures applicable to persons responsible for breaches of the provisions of this Regulation and of Directive 2006/43/EC may be taken. It should be noted that Members proposed moving a number of measures to Directive 2006/43 of the European Parliament and of the Council on statutory audits of annual accounts and consolidated accounts. These measures concern for instance: internal quality control review; professional scepticism; scope of the statutory audit; disclosure to third-country auditors and to third country authorities; organisation of the work; market integrity; audit of consolidated financial statements.
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A7-0177/2013
summary
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2013/04/25
Vote in committee, 1st reading/single reading
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2012/04/20
Referral to associated committees announced in Parliament
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2011/12/15
Committee referral announced in Parliament, 1st reading/single reading
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2011/11/30
Legislative proposal published
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COM(2011)0779
summary
PURPOSE: to strengthen the requirements for the statutory audit on the financial statements of public-interest entities (PIEs). PROPOSED ACT: Regulation of the European Parliament and of the Council. BACKGROUND: since 1984, EU rules have partially regulated statutory audit when a directive (Directive 1984/253/EEC) harmonised the procedures for the approval of auditors. Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, was adopted in 2006 and considerably broadened the scope of the former Directive. The financial crisis has highlighted weaknesses in the statutory audit especially with regard to Public-Interest Entities (PIE), such as banks insurance companies and listed companies. Given that many banks revealed huge losses from 2007 to 2009 on the positions they had held both on and off balance sheet, it is difficult for many citizens and investors to understand how auditors could give clean audit reports to their clients (in particular banks) for those periods. Statutory auditors and audit firms play an important role in society. They are entrusted by law to conduct statutory audits of public-interest entities with a view to enhancing the degree of confidence of the public in the annual and consolidated financial statements of such entities. In view of the public interest, better audit quality would contribute to the orderly functioning of markets by enhancing the integrity and efficiency of financial statements. IMPACT ASSESSMENT : the impact assessment resulted in the following preferred policy options: · the scope of statutory audit should be clarified and specified and the information that the auditor provides to users, the audited entities, audit committees and supervisors improved; · the prohibition of the provision of non-audit services to the audited entities and even the prohibition of the provision of non-audit services in general would effectively address the need to reinforce independence and professional scepticism. Moreover, stricter rules in the procedure for the appointment of auditors and the introduction of mandatory audit firm rotation would contribute to higher quality audits; · in order to facilitate an objective choice of an audit provider, contractual clauses limiting audit firm choice should be prohibited, the transparency on audit quality and on audit firms should be increased and an audit quality certification should be established; · ownership restrictions should be lifted in order to increase the choice of audit providers; · national audit supervisory authorities should be strengthened and an EU-wide cooperation within the European Securities and Markets Authority (ESMA) should be set up. LEGAL BASIS: Article 114 of the Treaty on the Functioning of the European Union (TFEU). CONTENT: this proposal lays down conditions for carrying out the statutory audit on the financial statements of PIEs. Directive 2006/43/EC already deals with certain requirements which apply to the statutory audit of PIEs. Those requirements will no longer be comprised in the Directive, but integrated (and further developed) in this Regulation. The main points are as follows: Conditions for carrying out statutory audit of public-interest entities: · an auditor should establish adequate policies and procedures to ensure compliance with the obligations under the Regulation regarding independence, internal quality control systems and the supervision of employees; · former auditors, key audit partners or their employees are not allowed to take up a key management position in the audited entity, to become a member of the audit committee of the audited entity, to become a non-executive member of the administrative body or to join the supervisory body of the audited entity within two years after the termination of the audit engagement; · the statutory auditor, audit firm or member of the audit firm's network will be prevented from providing certain non-audit services to their audited entities. For other non-services that are not fundamentally incompatible with the audit services, the audit committee or the competent authority will be empowered to assess whether or not they may be provided to the audited entity; · audit firms of significant size should focus their professional activity on the carrying out of statutory audit and should not be allowed to undertake non- audit services; · the content of the audit report disclosed to the public is expanded so that it: (i) explains the methodology used, especially how much of the balance sheet has been directly verified and how much has been based on system and compliance testing, the levels of materiality applied to perform the audit, the key areas of risk of material misstatements of the financial statements; (ii) explains whether the statutory audit was designed to detect fraud and, (iii) in the event of a qualified or adverse opinion or a disclaimer of opinion, explain the reasons for such a decision; · the auditor should also prepare a longer and more detailed report for the audit committee. This report would provide more detailed information on the audit carried out, on the situation of the undertaking as such (e. g. going concern) and the findings of the audit combined with the necessary explanations; · the auditor should keep certain documents and information for a period of five years. The appointment of statutory auditors or audit firms by public-interest entities: · in order to reinforce the independence and capacity of the audit committee, the latter should be composed of non-executive members, at least one member should have experience and knowledge in auditing and another one in accounting and/or auditing; · the proposal for the appointment of the auditor to the meeting of shareholders should be based on a recommendation of the audit committee. Unless it concerns the renewal of an audit engagement, the recommendation should contain at least two choices (excluding the incumbent auditor) and the audit committee should express a justified preference for one of them. The recommendation of the audit committee should be made after the completion of a due tendering process; · the proposal introduces mandatory rotation of audit firms after a maximum period of 6 years that may be, under certain exceptional circumstances, extended to 8 years; · where a public-interest entity has appointed two or more statutory auditors or audit firms, the maximum duration of the engagements will be 9 years; on an exceptional basis, such duration may be extended to 12 years. It also provides for a cooling-off period before the audit firm is able to carry out the statutory audit of the same entity again. Surveillance of the activities of auditors and audit firms carrying out statutory audit of public-interest entities: · each Member State should designate a competent authority responsible for the supervision of auditors and audit firms auditing PIEs. The proposal requires that the EU-wide cooperation between competent authorities takes place within ESMA; · a 'voluntary' pan-European audit quality certification is introduced to increase the visibility, recognition and reputation of all audit firms having capacities to conduct high quality audits of PIEs. ESMA should publish the requirements for obtaining the certificate along with any administrative and fee implications. Supervisory measures and penalties: administrative pecuniary sanctions on auditors and PIEs for identified violations are envisaged. Authorities should be transparent about the sanctions and measures they apply. BUDGETARY IMPLICATIONS: the Commission's proposal has no direct or indirect impact on the European Union budget. In particular, tasks that would be entrusted to EU supervisory bodies as mentioned in the proposal would not entail additional EU funding. DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the EU.
- DG {'url': 'http://ec.europa.eu/dgs/internal_market/', 'title': 'Internal Market and Services'}, BARROSO José Manuel
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COM(2011)0779
summary
Documents
- Legislative proposal published: COM(2011)0779
- Committee report tabled for plenary, 1st reading/single reading: A7-0177/2013
- Decision by Parliament, 1st reading/single reading: T7-0283/2014
- : Regulation 2014/537
- : OJ L 158 27.05.2014, p. 0077
- : OJ L 170 11.06.2014, p. 0066
| Amendments | Dossier |
| 1060 |
2011/0359(COD)
2012/10/19
ITRE
98 amendments...
Amendment 100 #
Proposal for a regulation Recital 20 (20) The value of statutory audit for the audited entity would be particularly enhanced if the communication between the statutory auditor or the audit firm, on the one hand, and the audit committee, on the other hand, was reinforced. Further to the regular dialogue during the carrying out of the statutory audit, it is important that the statutory auditor or the audit firm submits to the audit committee an additional and more detailed report on the results of the statutory audit. It should be possible to make such additional detailed reports available to the supervisors of public-interest entities
Amendment 101 #
Proposal for a regulation 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
Amendment 102 #
Proposal for a regulation 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. This would lead to more transparency in the selection procedure and to strengthened accountability vis-à- vis shareholders. 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 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 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 103 #
Proposal for a regulation 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
Amendment 104 #
Proposal for a regulation 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.
Amendment 105 #
Proposal for a regulation 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
Amendment 106 #
Proposal for a regulation Article 6 – paragraph 1 – subparagraph 1 – point j j) a statutory auditor or an audit firm shall have adequate remuneration policies providing sufficient performance incentives to secure audit quality. In particular, compensation and
Amendment 108 #
Proposal for a regulation Article 10 – title Pro
Amendment 109 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 1 1. A statutory auditor or an audit firm carrying out statutory audit of public- interest entities
Amendment 110 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 Where the
Amendment 111 #
Proposal for a regulation Article 10 – paragraph 2 Amendment 112 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 1 Amendment 113 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 2 Amendment 114 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 3. For the purposes of this Article,
Amendment 115 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new) viii a) human resources services that entail recruiting senior management.
Amendment 116 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 1 Amendment 117 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 2 Amendment 118 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 3 Amendment 119 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 4 Amendment 120 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 5 Amendment 121 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 122 #
Proposal for a regulation Article 10 – paragraph 5 – introductory part 5. Where an audit firm generates more than
Amendment 123 #
Proposal for a regulation Article 10 – paragraph 6 6.
Amendment 124 #
Proposal for a regulation Article 10 – paragraph 6 6.
Amendment 125 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 2 Where the audited entity is exempted from the obligation to have an audit committee, the audited entity shall decide which body or organ of the entity shall perform the functions assigned to the audit committee in this paragraph in order to avoid conflicts of interests, ensure independence, and professional ethics.
Amendment 126 #
Proposal for a regulation Article 16 – paragraph 5 – subparagraph 1 – introductory part Amendment 127 #
Proposal for a regulation Article 20 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
Amendment 129 #
Proposal for a regulation Article 22 – paragraph 4 Amendment 130 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 4 Amendment 131 #
Proposal for a regulation Article 24 – title Amendment 132 #
Proposal for a regulation Article 24 – paragraph 1 The audit committee of the public-interest entity shall
Amendment 133 #
Proposal for a regulation 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 134 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – introductory part 3.
Amendment 135 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – introductory part 3.
Amendment 136 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – introductory part 3.
Amendment 137 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – introductory part 3. Unless it concerns the renewal of an audit engagement in accordance with the second subparagraph of Article 33(1), the recommendation of the audit committee referred to in paragraph 2 of this Article, shall be prepared following a
Amendment 138 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point a (a) the audited entity shall
Amendment 139 #
Proposal for a regulation 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
Amendment 140 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point c (c) the audited entity shall prepare tender documents to the intention of the
Amendment 141 #
Proposal for a regulation Article 32 – paragraph 4 Amendment 142 #
Proposal for a regulation Article 32 – paragraph 5 – subparagraph 1 Amendment 143 #
Proposal for a regulation Article 32 – paragraph 5 – subparagraph 2 Amendment 144 #
Proposal for a regulation 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 6.
Amendment 147 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 1. The public-interest entity shall appoint a statutory auditor or audit firm for a
Amendment 148 #
Proposal for a regulation 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
Amendment 149 #
Proposal for a regulation 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 t
Amendment 150 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 Amendment 151 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew this engagement up to a maximum duration of combined, consecutive engagements o
Amendment 152 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew th
Amendment 153 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew this engagement
Amendment 154 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The
Amendment 155 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 156 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 157 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 158 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 159 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 160 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Where throughout a continuous engagement of
Amendment 161 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Where throughout a continuous engagement of 6 years at least two statutory auditors or audit firms have been appointed, the maximum duration of the engagement of each statutory auditor or audit firm shall not exceed 9 years.
Amendment 162 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 163 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 164 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 165 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 166 #
Proposal for a regulation 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
Amendment 167 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 1 Amendment 168 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 The statutory auditor or audit firm shall establish an appropriate 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 audit team. It shall be proportionate in view of the scale and the dimension of the activity of the statutory auditor or audit firm.
Amendment 169 #
Proposal for a regulation Article 33 – paragraph 5 – subparagraph 1 5. Where a statutory auditor or audit firm is replaced by another statutory auditor or audit firm, the former statutory auditor or
Amendment 170 #
Proposal for a regulation Article 33 – paragraph 5 – subparagraph 2 The former statutory auditor or audit firm shall also grant access to the incoming statutory auditors or audit firms to the additional reports to the audit committee referred to in Article 23 of previous years and to any information transmitted to competent authorities pursuant to Articles 25 and 27.
Amendment 171 #
Proposal for a regulation Article 33 – paragraph 6 Amendment 172 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 1 Amendment 173 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 2 Amendment 174 #
Proposal for a regulation Article 34 – paragraph 2 – subparagraph 1 2.
Amendment 175 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 1 1.
Amendment 176 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 2 – introductory part The
Amendment 177 #
Proposal for a regulation Article 35 – paragraph 2 – introductory part 2.
Amendment 178 #
Proposal for a regulation Article 35 – paragraph 3 Amendment 179 #
Proposal for a regulation Article 35 – paragraph 5 5. The
Amendment 180 #
Proposal for a regulation Article 35 – paragraph 6 Amendment 181 #
Proposal for a regulation Article 36 – paragraph 1 The European Auditing Activities Supervisory Authority, the competent authorities and any authority to which the competent authority referred to in Article 35(1) has delegated tasks shall be independent of statutory auditors and audit firms.
Amendment 182 #
Proposal for a regulation Article 37 The obligation of professional secrecy shall apply to all persons who are or have been employed by the European Auditing Activities Supervisory Authority and by the competent authorities or
Amendment 183 #
Proposal for a regulation Article 38 – title Powers of
Amendment 184 #
Proposal for a regulation Article 38 – paragraph 1 1. Without prejudice to Articles 40 and 41, in carrying out their tasks under this Regulation, neither the European Auditing Activities Supervisory Authority nor the competent authorities or any other public authorities of a Member State may
Amendment 185 #
Proposal for a regulation Article 38 – paragraph 2 – introductory part 2. In order to carry out
Amendment 186 #
Proposal for a regulation Article 38 – paragraph 3 – subparagraph 1 – introductory part 3. In order to carry out
Amendment 187 #
Proposal for a regulation Article 38 – paragraph 3 – subparagraph 2 The
Amendment 188 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 2 Amendment 189 #
Proposal for a regulation Article 46 – paragraph 5 a (new) 5a. Before X X 20XX [six years after the entry into force of this Regulation], the Commission shall submit an evaluation report, based on the ESMA reports and other relevant information, on all the tasks entrusted to ESMA by virtue of this Article.
Amendment 190 #
Proposal for a regulation Article 61 – paragraph 1 1. Member States shall lay down the rules on administrative sanctions and measures applicable in cases of breaches of the provisions of this Regulation
Amendment 191 #
Proposal for a regulation Article 61 – paragraph 2 a (new) 2a. Member States shall, in particular, ensure, in conformity with their national law, that the appropriate administrative measures can be taken or administrative penalties imposed against the legal or natural persons responsible for breaches of the provisions of this Regulation. Those measures and sanctions shall include the power for competent authorities to impose at least the following administrative measures and sanctions: (a) an order requiring the person responsible for the breach to cease the relevant conduct and to desist from a repetition of that conduct; and (b) sufficiently effective and dissuasive administrative fines that are proportionate.
Amendment 192 #
Proposal for a regulation Article 62 – paragraph 1 Amendment 194 #
Proposal for a regulation Article 62 – paragraph 3 Amendment 97 #
Proposal for a regulation 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 98 #
Proposal for a regulation Recital 19 (19) The results of the statutory audit should be presented to the stakeholders in the audit report. In order to increase the confidence of stakeholders in the financial statements of the audited entity, it is particularly important that the audit report is well-founded and solidly substantiated and its content expanded to include additional information about the auditee specific to the audit carried out. The audit report should in particular include sufficient information on the methodology used in the audit, especially how much of the balance sheet has been directly verified and how much has been based on system and compliance testing, on the levels of materiality applied to perform the audit, on the key areas of risk of material misstatements of the annual and consolidated financial statements, on whether the statutory audit was designed to detect fraud and, in the event of a qualified or adverse opinion or a disclaimer of opinion, on the reasons for such decision.
Amendment 99 #
Proposal for a regulation Recital 20 (20) The value of statutory audit for the audited entity would be particularly enhanced if the communication between the statutory auditor or the audit firm, on the one hand, and the audit committee, on
source: PE-498.010
2012/10/29
ECON
412 amendments...
Amendment 111 #
Proposal for a regulation Title 0 Proposal for a
Amendment 112 #
Proposal for a regulation Recital 1 (1) Statutory auditors and audit firms are entrusted by law to conduct statutory audits of public-interest entities with a view to enhancing the degree of confidence of the public in the annual and consolidated financial statements of such entities. The public-interest function of statutory audit
Amendment 113 #
Proposal for a regulation Recital 6 (6) The financial sector is evolving and new categories of financial institutions are created by Union law. The importance of new entities and activities outside the regular banking system is growing and their impact on financial stability has become greater. Therefore, it is appropriate that the definition of public-interest entity may also encompass
Amendment 114 #
Proposal for a regulation Recital 8 (8) Adequate internal organisation of statutory auditors and audit firms should contribute to preventing any threats to their independence. Thus, owners or shareholders of an audit firm, as well as those managing it, should not intervene in the carrying out of a statutory audit in any way which jeopardises the independence and objectivity of the statutory auditor who carries out the statutory audit on behalf of the audit firm. Additionally, statutory auditors and audit firms should establish appropriate internal policies and procedures in relation to employees and other persons involved in the statutory audit activity within their organisations in order to ensure compliance with their statutory obligations. Those policies and procedures should in particular seek to prevent and address any threats to independence and ensure the quality, integrity and thoroughness of the statutory audit. Those policies and procedures should be proportionate in view of the scale and complexity of the business of the statutory auditor or audit firm and the audited entities.
Amendment 115 #
Proposal for a regulation 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
Amendment 116 #
Proposal for a regulation 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
Amendment 117 #
Proposal for a regulation Recital 15 (15) The statutory audit results in an opinion on the truth and fairness of the financial statements of the audited entities. Stakeholders, however, might to be unaware of the limitations of an audit (materiality, sampling techniques, role of the auditor in the detection of fraud and the responsibility of managers), which can lead to an expectation gap. In order to reduce
Amendment 118 #
Proposal for a regulation Recital 19 (19) The results of the statutory audit should be presented to the stakeholders in the audit report. In order to increase the confidence of stakeholders in the financial statements of the audited entity, it is particularly important that the audit report is well-founded and solidly substantiated and its content expanded to include additional information specific to the audit carried out. The audit report should in particular include sufficient information on the methodology used in the audit, especially how much of the balance sheet has been directly verified and how much has been based on system and compliance testing, on the levels of materiality applied to perform the audit, on the key areas of risk of material misstatements of the annual and consolidated financial statements, on whether the statutory audit was designed to detect fraud and, in the event of a qualified or adverse
Amendment 119 #
Proposal for a regulation 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) board
Amendment 120 #
Proposal for a regulation 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
Amendment 121 #
Proposal for a regulation 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, 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
Amendment 122 #
Proposal for a regulation 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 selection procedure organised by the audited entity, under the responsibility of
Amendment 123 #
Proposal for a regulation 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
Amendment 124 #
Proposal for a regulation Recital 24 a (new) (24a) When it concerns the renewal of an audit engagement the audit committee shall base its recommendation periodically on a comprehensive assessment of the audit quality of the statutory auditor or audit firm. The comprehensive assessment shall include the consideration of professional competencies of the statutory auditor or audit firm (i.e. industry knowledge, infrastructure, technical know-how, IT competence), which may vary according to the size and complexity of the audited entity. The audit committee shall also consider adherence to relevant rules and regulations as well as to professional standards. The competent authority shall issue guidelines on the criteria of professional competencies to facilitate the selection procedure.
Amendment 125 #
Proposal for a regulation Recital 26 Amendment 126 #
Proposal for a regulation Recital 26 Amendment 127 #
Proposal for a regulation 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
Amendment 128 #
Proposal for a regulation 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.
Amendment 129 #
Proposal for a regulation 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.
Amendment 130 #
Proposal for a regulation 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
Amendment 131 #
Proposal for a regulation Recital 27 a (new) (27a) There should also be regular and open tendering of the related financial audit services and non-audit services as it provides small and medium-sized statutory auditors, audit firms and non- audit related service providers to present their services and skills in a transparent process and to increase their visibility as service providers for public-interest entities. The incumbent auditor does not necessarily have to perform related financial audit and non-audit services and so the tendering process strongly encourages audit committees to consider a broader range of prospective providers of audit and non-audit services. The purpose of tendering both financial audit related services and non-audit services is to not only evaluate the incumbent provider's performance but also the requirements of the audited entity.
Amendment 132 #
Proposal for a regulation Recital 27 a (new) (27a) Regularly putting the statutory audit out to tender may provide an opportunity for small and medium-sized audit firms to present their services and their preparedness in the context of a transparent procedure or for public- interest organisations to draw attention to themselves as potential service-providers. The advantage of a tender procedure is that the audit committee can choose a service-provider from among a wider range of contenders. To this end, it is recommended that the audit committee draw up appropriate internal rules on tender procedures, which it should also communicate to owners.
Amendment 133 #
Proposal for a regulation Recital 27 a (new) (27a) The maximum duration of an audit engagement of a public-interest entity which is a financial company shall not exceed 14 years.
Amendment 134 #
Proposal for a regulation Recital 31 a (new) (31a) Authorities should set out common standards, best practices and enforcement activities for consistent enforcement of applicable accounting standards, especially impairment rules as different approaches of audited entities with regard to the impairment of Greek bonds were accepted by the same auditor in some Member States in 2011.
Amendment 135 #
Proposal for a regulation Recital 33 (33) The market for the provision of statutory audit services to public-interest entities evolves over time. It is therefore necessary that competent authorities and ESMA monitor the developments in the market, particularly as regards possible limited choice of auditor and the risks that arise from high market concentration.
Amendment 136 #
Proposal for a regulation 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. Thus ESMA would 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. According to the proposal, ESMA would create a permanent internal committee composed of the competent authorities designated for carrying out the tasks provided for in the draft Regulation. 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. The current structure, the EGAOB, cannot ensure supervisory convergence across the Union in respect of auditors conducting audits of public-interest entities that are organised within networks. The EGAOB does not have the power to issue guidelines or even technical standards. The same applies to a Level-3-Lamfalussy-Committee structure where also necessary powers and resources are lacking. An EU-wide cooperation on auditor oversight within ESMA would benefit from the experience and resources of ESMA as ESMA is already working in the field of auditing regarding public-interest entities. ESMA was created on 1 January 2011 and is fully operational. The integration of EU-wide cooperation into ESMA would avoid unnecessary additional costs. Member States would be sufficiently represented and would be part of the decision-making process with ESMA. The Commission shall after a transitional period of X years come back to the European Parliament and the Council with a report where it has ESMA's work and the future role for ESMA. The Commission shall evaluate ESMA has enough resources to fulfil its tasks laid down in this Regulation and propose budget increases if necessary.
Amendment 137 #
Proposal for a regulation 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 138 #
Proposal for a regulation Recital 37 (37) The scope of cooperation between the competent authorities of Member States should include exchange of information, cooperation with regard to quality assurance assurance reviews, assistance to investigations related to the carrying out of statutory audits of public-interest entities, including in cases where the conduct under investigation does not constitute an infringement of any legislative or regulatory provision in force in the Member States concerned and contingency planning. The modalities of cooperation between the competent authorities of the Member States may include the creation of colleges of competent authorities and the delegation of tasks among themselves. The concept of network in which auditors and firms operate should be taken into account in such cooperation. Competent authorities, ESMA and the European Supervisory Authorities should respect appropriate confidentiality and professional secrecy rules.
Amendment 139 #
Proposal for a regulation Recital 39 (39) The interrelation of capital markets calls for empowering national competent authorities, ESMA and the European Supervisory Authorities to cooperate with supervisory authorities and bodies of third countries regarding the exchange of information or quality assurance reviews. However, where the cooperation with third country authorities is related to audit working papers or other documents held by statutory auditors or audit firms, the procedures of Directive 2006/43/EC should apply.
Amendment 140 #
Proposal for a regulation 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
Amendment 141 #
Proposal for a regulation Recital 44 (44) In order to take account of the technical developments in the financial markets, in auditing and the audit profession and to specify the requirements laid down in this Regulation, the Commission should be empowered to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the European Union. In particular, the use of delegated acts is necessary to
Amendment 142 #
Proposal for a regulation Recital 44 (44) In order to take account of the technical developments in the financial markets, in auditing and the audit profession and to specify the requirements laid down in this Regulation, the Commission should be empowered to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the European Union. In particular, the use of delegated acts is necessary to adapt the list of related audit services and of prohibited non-audit services as well as to set out the level of fees that ESMA concerned could charge for delivering the European Quality Certificate to statutory auditors and audit firms. It is of particular importance that the Commission carries out appropriate consultations during its preparatory work, including at expert level and with ESMA. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the ESMA, European Parliament and to the Council.
Amendment 143 #
Proposal for a regulation Recital 45 Amendment 144 #
Proposal for a regulation Recital 45 Amendment 145 #
Proposal for a regulation Recital 45 (45) In order to ensure legal certainty and the smooth transition to the regime introduced by this Regulation, it is important to introduce a transitional regime regarding the entry into force of
Amendment 146 #
Proposal for a regulation Recital 47 a (new) Amendment 147 #
Proposal for a regulation 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 148 #
Proposal for a regulation 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 149 #
Proposal for a regulation 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 150 #
Proposal for a regulation Article 3 – paragraph 1 For the purposes of this Regulation, the definitions laid down in Article 2 of Directive 2006/43/EC shall apply, except for the definitions of
Amendment 151 #
Proposal for a regulation Article 3 – paragraph 1 For the purposes of this Regulation, the definitions laid down in Article 2 of Directive 2006/43/EC shall apply, except for the definitions of ‘audit report’
Amendment 152 #
Proposal for a regulation Article 4 Amendment 153 #
Proposal for a regulation Article 5 – paragraph 1 A statutory auditor or audit firm shall take all necessary steps to ensure that the
Amendment 154 #
Proposal for a regulation 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 155 #
Proposal for a regulation Article 8 – paragraph 1 – introductory part 1. A statutory auditor or a key audit partner who carries out a statutory audit of a public-interest entity on behalf of an audit firm shall not, before a period of at least
Amendment 156 #
Proposal for a regulation 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
Amendment 157 #
Proposal for a regulation 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
Amendment 158 #
Proposal for a regulation Article 9 – paragraph 1 – subparagraph 2 For the purposes of the first subparagraph, contingent fees means fees for audit engagements calculated on a predetermined basis relating to the outcome or result of a transaction or the result of the work performed. Fees shall not be regarded as being contingent if a court or a competent authority has established them. In order to guarantee the necessary independence as well as the expertise, every auditor or audit firm, should generate the majority of its fees from statutory audit missions.
Amendment 159 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 160 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 161 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 162 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 163 #
Proposal for a regulation 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
Amendment 164 #
Proposal for a regulation Article 9 – paragraph 2 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, other than fees for such of those services which are required by law, shall be limited to no more than 1
Amendment 165 #
Proposal for a regulation 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
Amendment 166 #
Proposal for a regulation Article 9 – paragraph 3 Amendment 167 #
Proposal for a regulation Article 9 – paragraph 3 – subparagraph 1 Amendment 168 #
Proposal for a regulation Article 9 – paragraph 3 – subparagraph 2 Amendment 169 #
Proposal for a regulation Article 9 – paragraph 3 – subparagraph 3 Amendment 171 #
Proposal for a regulation Article 10 – title Pro
Amendment 172 #
Proposal for a regulation Article 10 a (new) Amendment 173 #
Proposal for a regulation Article 10 a (new) Article 10a Tender of non-audit services The administrative or supervisory body shall decide whether a non-audit service shall be subject to an open and transparent tendering procedure unless the value of the fee for such a non-audit service is below the value of the statutory audit fee.
Amendment 174 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 1 Amendment 175 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 1 1. A statutory auditor or an audit firm carrying out statutory audit of public- interest entities
Amendment 176 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 1 A statutory auditor or an audit firm carrying out a statutory audit of a public
Amendment 177 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 1 A statutory auditor or an audit firm carrying out a statutory audit of a public- interest entit
Amendment 178 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 1 A statutory auditor or an audit firm carrying out statutory audit of public- interest entities
Amendment 179 #
Proposal for a regulation 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
Amendment 180 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 1 A statutory auditor or an audit firm carrying out statutory audit of public- interest entities may provide to the audited entity, to its parent undertaking and to its controlled undertakings statutory audit services and related financial audit services, as far as they do not affect its independence.
Amendment 181 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 Where the statutory auditor or audit firm belongs to a network,
Amendment 182 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 Where the statutory auditor or audit firm belongs to a network,
Amendment 183 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 Where the statutory auditor or audit firm belongs to a network,
Amendment 184 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 Where the statutory auditor belongs to a network,
Amendment 185 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 a (new) (2a) The parent company is not audited by the statutory auditor or an audit firm carrying out statutory audit or a network firm related hereto, the restrictions above to provide prohibited services should not apply.
Amendment 186 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 a (new) The audit committee shall be informed on a regular basis about all audit services and related audit services provided by the statutory auditor.
Amendment 187 #
Proposal for a regulation Article 10 – paragraph 2 Amendment 188 #
Proposal for a regulation Article 10 – paragraph 2 Amendment 189 #
Proposal for a regulation Article 10 – paragraph 2 Amendment 190 #
Proposal for a regulation Article 10 – paragraph 2 – introductory part (2) For the purposes of this Article,
Amendment 191 #
Proposal for a regulation Article 10 – paragraph 2 – point e (e) providing certification on compliance with tax requirements
Amendment 192 #
Proposal for a regulation 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 193 #
Proposal for a regulation Article 10 – paragraph 2 – point e b (new) (eb) audit of occupational pension schemes and pension obligations;
Amendment 194 #
Proposal for a regulation Article 10 – paragraph 2 – point f (f) any other statutory duty related to audit work imposed by
Amendment 195 #
Proposal for a regulation Article 10 – paragraph 2 – point f a (new) Amendment 196 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 1 Amendment 197 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 1 Amendment 198 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 1 A statutory auditor or an audit firm carrying out statutory audit of public- interest entities shall
Amendment 199 #
Proposal for a regulation 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 200 #
Proposal for a regulation 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 201 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 2 Amendment 202 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 2 Amendment 203 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 2 Where the statutory auditor belongs to a network,
Amendment 204 #
Proposal for a regulation 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-
Amendment 205 #
Proposal for a regulation 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-
Amendment 206 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 2 a (new) (2a) A statutory auditor or an audit firm carrying out statutory audit of public- interest entities may directly or indirectly provide to the audited entity, to its parent undertaking and to its controlled undertakings non-audit services only with the audit committee’s explicit authorisation to do so.
Amendment 207 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 2 b (new) (2b) 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 non-audit services only with the audit committee’s explicit authorisation to do so.
Amendment 208 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article,
Amendment 209 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article, prohibited non-audit services shall mean services entailing conflict of interest in all cases:
Amendment 210 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article, prohibited non-audit services shall mean:
Amendment 211 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article, prohibited non-audit services shall mean:
Amendment 212 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a Amendment 213 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – introductory part (a)
Amendment 214 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point i Amendment 215 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point i (i)
Amendment 216 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point i a (new) (ia) Providing tax services involving acting as an advocate before a public tribunal or court in the resolution of a tax matter and the amounts involved are material to the financial statements;
Amendment 217 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point i b (new) (ib) Preparing tax calculations of current and deferred tax liabilities or assets for the purpose of preparing accounting entries that are material to the financial statements;
Amendment 218 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point i c (new) (ic) Providing tax or corporate finance advice when the effectiveness of the advice depends upon a particular accounting treatment or presentation in the financial statements and when there is reasonable doubt about the appropriateness of the accounting treatment and the outcome or consequences of the advice would materially affect such financial statements;
Amendment 219 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point ii Amendment 220 #
Proposal for a regulation 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 221 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point ii (ii) bookkeeping
Amendment 222 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point ii (ii) bookkeeping
Amendment 223 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii Amendment 224 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii (iii) designing
Amendment 225 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii (iii) designing
Amendment 226 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii (iii) designing and implementing internal control or risk management
Amendment 227 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii – point a (new) a) form a significant part of the internal control over financial reporting of the audited entity, or
Amendment 228 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii – point b (new) b) generate information that is significant to the accounting records of financial statements that are subject to the statutory audit;
Amendment 229 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv Amendment 230 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv (iv) valuation services
Amendment 231 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv (iv) valuation services
Amendment 232 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv (iv) providing valuation services
Amendment 233 #
Proposal for a regulation 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 234 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point v Amendment 235 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point v (v)
Amendment 236 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point v (v)
Amendment 237 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi Amendment 238 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi Amendment 239 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi Amendment 240 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi Amendment 241 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vii a (new) (viia) payroll services;
Amendment 242 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii (viii)
Amendment 243 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii (viii)
Amendment 244 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new) (viiia) human resources services with respect to senior management in a position to exert significant influences over the preparation of the accounting records or financial statement subject to the statutory audit, where such services involve.
Amendment 245 #
Proposal for a regulation 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 246 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new) (viiia) general management consultancy services
Amendment 247 #
Proposal for a regulation 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 248 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii b (new) (viiib) tax consultancy and advising services
Amendment 249 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii c (new) (viiic) due diligence services to the buy side on potential mergers and acquisitions and providing assurance to the audited entity on other parties at a financial or corporate transactions.
Amendment 250 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii c (new) (viiic) promoting, dealing in, or underwriting client shares;
Amendment 251 #
Proposal for a regulation 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 252 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b Amendment 253 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b Amendment 254 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b Amendment 255 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b Amendment 256 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b Amendment 257 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point i Amendment 258 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point i (i) human resources services,
Amendment 259 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point ii Amendment 260 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point ii Amendment 261 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point iii Amendment 262 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point iv Amendment 263 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point iv Amendment 264 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point iv (iv) due diligence services to the vendor
Amendment 265 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 266 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 267 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 268 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 269 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 270 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 271 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 272 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 273 #
Proposal for a regulation Article 10 – paragraph 3 a (new) (3a) A statutory auditor or audit firm may provide non-audit services other than prohibited non-audit services where: a. the provision of those services has been approved by the audit committee, in the light of its obligation under Article 31 to satisfy itself as to the auditor's likely ability to mitigate any threats to its independence in its conduct as statutory auditor; and b. the competent authority has not exercised its power under Article 38 – paragraph 6 a (new), to prohibit the provision of those services.
Amendment 274 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 1 Amendment 275 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 1 When a member of the network to which the statutory auditor or the audit firm carrying out statutory audit of a public- interest entity belongs provides non-audit services to an undertaking incorporated in a third country controlled by the audited public-interest entity, the
Amendment 276 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 2 Amendment 277 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 3 Amendment 278 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 3 Being involved in the decision-taking of the audited entity and the provision of
Amendment 279 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 4 Amendment 280 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 4 Amendment 281 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 4 Amendment 282 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 4 The provision of the services referred to in points (i) and (iv) to (viii) of paragraph 3(a) shall be
Amendment 283 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 5 Amendment 284 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 285 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 286 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 287 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 288 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 289 #
Proposal for a regulation Article 10 – paragraph 5 – point a Amendment 290 #
Proposal for a regulation Article 10 – paragraph 5 – point b Amendment 291 #
Proposal for a regulation Article 10 – paragraph 6 Amendment 292 #
Proposal for a regulation Article 10 – paragraph 6 Amendment 293 #
Proposal for a regulation Article 10 – paragraph 6 6.
Amendment 294 #
Proposal for a regulation Article 10 – paragraph 6 6.
Amendment 295 #
Proposal for a regulation Article 10 – paragraph 6 6.
Amendment 296 #
Proposal for a regulation Article 10 – paragraph 6 6. The Commission shall be empowered to adopt delegated acts in accordance with Article 68 for the purpose of adapting the list of related financial audit services referred to in paragraph 2
Amendment 297 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point c Amendment 298 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point c (c)
Amendment 299 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point c (c)
Amendment 300 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point c (c) request permission from the audit committee to provide
Amendment 301 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point c (c) request permission from the audit committee to provide
Amendment 302 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point d Amendment 303 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point d Amendment 304 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point d Amendment 305 #
Proposal for a regulation 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
Amendment 306 #
Proposal for a regulation Article 15 – paragraph 2 The statutory auditor or the audit firm shall maintain professional scepticism in particular when reviewing management estimates relating to
Amendment 307 #
Proposal for a regulation Article 16 – paragraph 5 – subparagraph 1 – point c (c) an audit plan setting out the probable scope and method of the statutory audit
Amendment 308 #
Proposal for a regulation Article 16 – paragraph 5 – subparagraph 1 – point c (c) an audit plan setting out the probable scope and method of the statutory audit
Amendment 309 #
Proposal for a regulation 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 310 #
Proposal for a regulation 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
Amendment 311 #
Proposal for a regulation Article 21 – paragraph 1 – indent 2 – an additional report to the audit committee and the competent authority in accordance with Article 23 c.
Amendment 312 #
Proposal for a regulation Article 21 – paragraph 1 – indent 2 a (new) - an additional non-financial and CSR report in accordance with Article 23 b
Amendment 314 #
Proposal for a regulation Article 22 – paragraph 2 – introductory part 2. The audit report shall be in writing and in digital form. It shall at least:
Amendment 315 #
Proposal for a regulation 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 316 #
Proposal for a regulation Article 22 – paragraph 2 – point r Amendment 317 #
Proposal for a regulation Article 22 – paragraph 2 – point r (r) indicate the non-audit services referred to in Article 10(3)(b)(i) and (ii) that the audit committee allowed the statutory auditor
Amendment 318 #
Proposal for a regulation Article 22 – paragraph 2 – point r (r) indicate the non-audit services referred to in Article 10
Amendment 319 #
Proposal for a regulation Article 22 – paragraph 2 – point s Amendment 320 #
Proposal for a regulation Article 22 – paragraph 2 – point t (t) give an opinion which shall state clearly the opinion of the statutory auditor(s) or the audit firm(s) as to whether the annual or consolidated financial statements give a true and fair view and have been prepared in accordance with the relevant financial reporting framework and, where appropriate, whether the annual or consolidated financial statements comply
Amendment 321 #
Proposal for a regulation Article 22 – paragraph 2 – point t (t) give an opinion which shall state clearly the opinion of the statutory auditor(s) or the audit firm(s) as to whether the annual or consolidated financial statements give a true and fair view and have been prepared in accordance with the relevant financial reporting framework and, where appropriate, whether the annual or consolidated financial statements comply with statutory requirements; in accordance with International Standards on Auditing the audit opinion shall be either unqualified, qualified, an adverse opinion or, if the statutory auditor(s) or audit firm(s) are unable to express an audit opinion, a disclaimer of opinion. In case of a qualified or an adverse opinion or a disclaimer of opinion, the report shall explain the reasons of such decision;
Amendment 322 #
Proposal for a regulation Article 22 – paragraph 2 – point u (u) refer in accordance with International Standards on Auditing to any matters to which the statutory auditor(s) or the audit firm(s) draw attention by way of emphasis without qualifying the audit opinion;
Amendment 323 #
Proposal for a regulation Article 22 – paragraph 2 – point v (v) give an opinion in accordance with International Standards on Auditing concerning the consistency or otherwise of the annual report with the annual financial statements for the same fiscal year;
Amendment 324 #
Proposal for a regulation Article 22 – paragraph 2 – point v a (new) (va) give an opinion concerning the promotion and implementation of the corporate social and environmental responsibility adopted by the audited entity;
Amendment 325 #
Proposal for a regulation 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 326 #
Proposal for a regulation 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,
Amendment 327 #
Proposal for a regulation 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
Amendment 328 #
Proposal for a regulation 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 accordance with International Standards on Auditing. In a separate paragraph each statutory auditor or audit firm shall state the reasons of disagreement.
Amendment 329 #
Proposal for a regulation Article 22 – paragraph 4 Amendment 330 #
Proposal for a regulation Article 22 – paragraph 4 4. The audit report shall not
Amendment 331 #
Proposal for a regulation 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 332 #
Proposal for a regulation 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 333 #
Proposal for a regulation Article 23 – paragraph 1 a (new) (1a) The statutory auditor(s) or the audit firm(s) carrying out statutory audit of credit institutions and insurance undertakings, in accordance with Article 16 of Regulation (EU) No 1093/2010 and of Regulation (EU) No 1094/2010, respectively shall also submit the additional report to the EBA, EIOPA and the ESRB.
Amendment 334 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 4 Amendment 335 #
Proposal for a regulation Article 23 – paragraph 2 – point e (e) describe the distribution of tasks among the statutory auditor(s)s and/or the audit firm(s)
Amendment 336 #
Proposal for a regulation Article 23 – paragraph 2 – point e (e) describe the distribution of tasks among the statutory auditor(s)
Amendment 337 #
Proposal for a regulation 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 338 #
Proposal for a regulation 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 339 #
Proposal for a regulation 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 340 #
Proposal for a regulation 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 341 #
Proposal for a regulation Article 23 – paragraph 5 5.
Amendment 342 #
Proposal for a regulation 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. The non-financial reporting shall as minimum take the fourth directive on annual accounts 2003/51/EC that requires enterprises to disclose in their annual reports environmental and employee-related information to the extent necessary for an understanding of the company's development, performance or position as a starting point. 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 343 #
Proposal for a regulation Article 24 – paragraph 1 The audit committee of the public-interest entity shall monitor the work of the statutory auditor(s) or audit firm(s) carrying out 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 344 #
Proposal for a regulation Article 24 – paragraph 1 The audit committee of the public-interest entity shall monitor the work of the statutory auditor(s) or audit firm(s) carrying out the statutory audit, and, when more than one statutory auditor or audit firm have been appointed, the distribution of tasks between them and their rotation.
Amendment 345 #
Proposal for a regulation 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
Amendment 346 #
Proposal for a regulation Article 24 – paragraph 4 In
Amendment 347 #
Proposal for a regulation Article 25 – paragraph 1 – subparagraph 1 – introductory part Amendment 348 #
Proposal for a regulation Article 25 – paragraph 1 – subparagraph 1 – point c (c) a refusal to
Amendment 349 #
Proposal for a regulation Article 25 – paragraph 1 – subparagraph 2 The statutory auditor or the audit firm shall also have a duty to report any facts and
Amendment 350 #
Proposal for a regulation Article 25 – paragraph 2 – subparagraph 1 Competent authorities supervising
Amendment 351 #
Proposal for a regulation Article 25 – paragraph 2 – subparagraph 1 Competent authorities supervising credit institutions and insurance undertakings shall establish regular a dialogue with the statutory auditors and audit firms carrying out the statutory audit of those institutions and undertakings. The competent authority and the statutory auditor or audit firm shall inform each other about relevant facts or decisions referred to in paragraph 1.
Amendment 352 #
Proposal for a regulation Article 25 – paragraph 2 – subparagraph 2 Amendment 353 #
Proposal for a regulation Article 25 – paragraph 2 a (new) (2a) At least once a year, the ESRB shall organise a meeting with the statutory auditors and audit firms or networks carrying out the statutory audit of any FSB identified systemically important financial institutions in order to inform the ESRB of sectoral or any significant developments in those systemically important financial institutions.
Amendment 354 #
Proposal for a regulation Article 25 – paragraph 3 Amendment 355 #
Proposal for a regulation Article 25 – paragraph 3 3. The disclosure in good faith to the competent authorities, by the statutory auditor or audit firm
Amendment 356 #
Proposal for a regulation 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
Amendment 357 #
Proposal for a regulation 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
Amendment 358 #
Proposal for a regulation Article 27 – paragraph 1 – subparagraph 3 Statutory auditors and audit firms shall communicate to
Amendment 359 #
Proposal for a regulation Article 27 – paragraph 2 – subparagraph 1 – point f (f) a list of public-interest entities for which the statutory auditor or audit firm has carried out statutory audits during the preceding financial year and a list of the entities from which the statutory auditor or audit firm receives more than 5% of its annual revenue generated by fees coming from statutory audit and non audit services;
Amendment 360 #
Proposal for a regulation Article 27 – paragraph 2 – subparagraph 1 – point k a (new) (ka) a statement on the official CSR policy of the statutory auditor
Amendment 361 #
Proposal for a regulation Article 29 – paragraph 1 A statutory auditor or audit firm shall provide annually to his, her or its competent authority a list of the audited public-interest entities by revenue generated from them. This list concerns revenues generated by audit and non audit services.
Amendment 362 #
Proposal for a regulation 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 363 #
Proposal for a regulation 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
Amendment 364 #
Proposal for a regulation Article 31 – paragraph 1 – subparagraph 2 A
Amendment 365 #
Proposal for a regulation Article 31 – paragraph 1 – subparagraph 2 At least one member of the audit committee shall have competence in
Amendment 366 #
Proposal for a regulation Article 31 – paragraph 1 – subparagraph 3 A majority of the members of the audit committee shall be independent. The chair
Amendment 367 #
Proposal for a regulation 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 368 #
Proposal for a regulation 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 369 #
Proposal for a regulation Article 31 – paragraph 3 Amendment 370 #
Proposal for a regulation Article 31 – paragraph 5 – point c Amendment 371 #
Proposal for a regulation Article 31 – paragraph 5 – point d a (new) (da) monitor the quality of the statutory auditors or audit firms, taking into account any findings and conclusions by the competent authority pursuant to Article 40(6);
Amendment 372 #
Proposal for a regulation Article 31 – paragraph 5 – point e (e) be responsible for the procedure on the selection of statutory auditor(s) or audit firm(s) and recommend the statutory auditor(s) or audit firm(s) to be appointed by the audited companies Annual General Meeting in accordance with Articles 32;
Amendment 373 #
Proposal for a regulation Article 31 – paragraph 5 – point f (f) a
Amendment 374 #
Proposal for a regulation Article 31 – paragraph 5 – point f (f) a
Amendment 375 #
Proposal for a regulation 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 376 #
Proposal for a regulation Article 32 – paragraph 2 – subparagraph 2 Amendment 377 #
Proposal for a regulation Article 32 – paragraph 2 – subparagraph 2 Amendment 378 #
Proposal for a regulation Article 32 – paragraph 2 – subparagraph 3 Amendment 379 #
Proposal for a regulation 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
Amendment 380 #
Proposal for a regulation 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
Amendment 381 #
Proposal for a regulation Article 32 – paragraph 2 – subparagraph 3 When it concerns the renewal of an audit engagement
Amendment 382 #
Proposal for a regulation 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
Amendment 383 #
Proposal for a regulation 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 384 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – introductory part Amendment 385 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – introductory part Amendment 386 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – introductory part Amendment 387 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point a Amendment 388 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point a (a)
Amendment 389 #
Proposal for a regulation 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
Amendment 390 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point b (b) the audit
Amendment 391 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point b (b) the audited entity shall
Amendment 392 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point c (c) the audit
Amendment 393 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point d (d) the audit
Amendment 394 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point f (f) the audited entity shall evaluate 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 audit committee shall perform a comprehensive assessment of the proposals made by the statutory auditors or audit firms in a transparent and systematic approach that 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. The competent authority shall issue guidelines on the criteria of professional competencies. The audited entity and the audit committee shall take into consideration any inspection report on the
Amendment 395 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point f (f) the audit committee
Amendment 396 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point g (g) the audit
Amendment 397 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 2 Amendment 398 #
Proposal for a regulation 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 399 #
Proposal for a regulation Article 32 – paragraph 5 – subparagraph 1 The proposal of the administrative or supervisory board to the general meeting of shareholders or members of the audited entity for the appointment of statutory auditors or audit firms shall include the recommendation made by the audit committee. The proposal to the general meeting shall be accompanied by the results of the comprehensive assessment referred to in Article 32 (2) and (3)
Amendment 400 #
Proposal for a regulation 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 401 #
Proposal for a regulation Article 32 – paragraph 6 – subparagraph 1 Amendment 402 #
Proposal for a regulation Article 32 – paragraph 6 – subparagraph 1 Amendment 403 #
Proposal for a regulation Article 32 – paragraph 6 – subparagraph 1 In the case of a credit institution or insurance undertaking, the administrative or supervisory board shall submit its draft proposal to the competent authority referred to in Article 35(2) and ESMA. ESMA will consult on such proposals with EBA and EIOPA. The competent authority referred to in Article 35(2) and ESMA shall have the right to veto the choice proposed in the recommendation. Any such opposition shall be duly justified.
Amendment 404 #
Proposal for a regulation Article 32 – paragraph 6 – subparagraph 2 Amendment 405 #
Proposal for a regulation Article 32 – paragraph 6 – subparagraph 2 The absence of a reply by the competent authority or ESMA within the prescribed time-limit following submission of the audit committee's recommendation shall be considered as constituting an implied consent to the recommendation.
Amendment 406 #
Proposal for a regulation 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 407 #
Proposal for a regulation Article 32 a (new) Amendment 409 #
Proposal for a regulation Article 33 – title Amendment 410 #
Proposal for a regulation Article 33 – title Duration of the statutory audit engagement
Amendment 411 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph -1 (new) (-1) For the purposes of the application of Article 37 (1) of Directive 2006/43/EC, for the appointment of statutory auditors or audit firms by public-interest entities, the conditions set out in paragraphs 2 to 7 shall apply. Where Article 37 (2) of Directive 2006/43/EC applies paragraphs 2 to 4 of this Article shall not apply.
Amendment 412 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 Amendment 413 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 The public-interest entity shall appoint
Amendment 414 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 The public-interest entity shall appoint a statutory auditor or audit firm for an
Amendment 415 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 The public-interest entity shall appoint a
Amendment 416 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 The public-interest entity shall appoint a statutory auditor
Amendment 417 #
Proposal for a regulation 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 t
Amendment 418 #
Proposal for a regulation Article 33 – paragraph 1 a (new) (1a) Public-interest entities shall conduct a public tendering process for the statutory audit every 15 years following the conditions set out in Article 32.
Amendment 419 #
Proposal for a regulation Article 33 – paragraph 1 a (new) (1a) The audit committee shall consider whether or not to initiate a tender process for the statutory audit following the conditions set out in Article 32.
Amendment 420 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 Amendment 421 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 Amendment 422 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 Amendment 423 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 Amendment 424 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew th
Amendment 425 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew th
Amendment 426 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew th
Amendment 427 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew this
Amendment 428 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew this engagement
Amendment 429 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 a (new) Amendment 430 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 431 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 432 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 433 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 434 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 435 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of
Amendment 436 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of the combined two engagements shall not exceed
Amendment 437 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of the combined t
Amendment 438 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of the combined two engagements shall not exceed
Amendment 439 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 440 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 441 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 442 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 443 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 444 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Where
Amendment 445 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Where throughout a continuous engagement of
Amendment 446 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 a (new) (4a) 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 447 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 448 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 449 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 450 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 451 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 452 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 453 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 454 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 455 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 456 #
Proposal for a regulation 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 457 #
Proposal for a regulation Article 33 – paragraph 3 3. 3. By way of derogation from paragraphs 1 and 2, on an exceptional basis the public-
Amendment 458 #
Proposal for a regulation 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
Amendment 459 #
Proposal for a regulation 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
Amendment 460 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 Amendment 461 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 The statutory auditor or audit firm shall establish an appropriate gradual rotation mechanism with regard to the
Amendment 462 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 The statutory auditor or audit firm shall establish a
Amendment 463 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 The statutory auditor or audit firm shall establish an appropriate 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
Amendment 464 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 The statutory auditor or audit firm shall establish an appropriate 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 audit team. It shall be proportionate in view of the scale and the dimension of the activity of the statutory auditor or audit firm.
Amendment 465 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 a (new) (2a) 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 466 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 3 Amendment 467 #
Proposal for a regulation 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
Amendment 468 #
Proposal for a regulation 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
Amendment 469 #
Proposal for a regulation Article 33 – paragraph 5 – subparagraph 2 The former statutory auditor or audit firm shall also grant access to the incoming statutory auditors or audit firms to the additional reports to the audit committee referred to in Article 23
Amendment 470 #
Proposal for a regulation Article 33 – paragraph 5 – subparagraph 2 The former statutory auditor or audit firm shall also grant access to the incoming
Amendment 471 #
Proposal for a regulation Article 33 – paragraph 5 – subparagraph 2 The former statutory auditor or audit firm shall also grant access to the incoming statutory auditor(s) or audit firm(s) to the additional reports to the audit committee referred to in Article 23 of previous years and to any information transmitted to competent authorities pursuant to Articles 25 and 27.
Amendment 472 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 1 Amendment 473 #
Proposal for a regulation 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 474 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 1 ESMA shall develop draft regulatory technical standards to specify technical requirements on the performance of statutory audits by more than one statutory auditor or audit firm including the rotation of tasks referred to in paragraph 1 and the content of the handover file referred to in paragraph
Amendment 475 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 2 Amendment 476 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 2 – introductory part The competent authority/authorities shall be one of the following:
Amendment 477 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 2 – point c (c) the competent authorit
Amendment 478 #
Proposal for a regulation Article 35 – paragraph 2 Amendment 479 #
Proposal for a regulation Article 38 – paragraph 6 a (new) (6a) A competent authority may, on the basis of clear evidence, add to the list of prohibited non-audit services for statutory auditors and audit firms where it concludes that the provision of such services represents a threat to auditor independence.
Amendment 480 #
Proposal for a regulation 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 implementation of the provisions of Article 33(1), in particular regarding the rotation of tasks;
Amendment 481 #
Proposal for a regulation 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 482 #
Proposal for a regulation Article 42 Amendment 484 #
Proposal for a regulation Article 42 – paragraph 1 – subparagraph 1 The competent authorities referred to in Article 35(1) shall regularly monitor the developments in
Amendment 485 #
Proposal for a regulation Article 42 – paragraph 1 – subparagraph 2 – point a (a) the risks arising from high concentration
Amendment 486 #
Proposal for a regulation Article 42 – paragraph 1 – subparagraph 2 – point a (a) the risks arising from high concentration, including the demise of audit firms with significant market share, the disruption in the provision of statutory audit services whether in a specific sector or across sectors, the further accumulation of risk in the market and the impact on the overall stability of the financial sector; in case such risks arise, the competent authority has to report immediately to the EC.
Amendment 487 #
Proposal for a regulation Article 42 – paragraph 1 – subparagraph 2 – point b (b) the need to adopt legally binding measures to mitigate those risks.
Amendment 488 #
Proposal for a regulation Article 42 – paragraph 2 – subparagraph 2 ESMA, EBA and EIOPA shall use those reports to draw up a joint report on the situation at Union level. The report shall be
Amendment 490 #
Proposal for a regulation Article 43 – paragraph 4 – subparagraph 2 a (new) (2a) The competent authorities shall advise ESMA on the general status of contingency plans.
Amendment 491 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 1 The cooperation between competent authorities shall be organised within the framework of ESMA under the responsibility of the board of supervisors.
Amendment 492 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 1 a (new) (1a) 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 493 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 2 ESMA shall create a permanent internal committee pursuant to Article 41 of Regulation (EU) No 1095/2010 for this purpose. Such internal committee shall be at least composed of the competent authorities referred to in Article 35(1) of this Regulation. The competent authorities referred to in Article 32 of Directive 2006/43/EC shall be invited to attend the meetings of such internal committee concerning matters related to approval and registration of statutory auditors and audit firms and relations with third countries in so far as relevant to the statutory audit of public-interest entities (auditing standing committee). The internal committee may create specific colleges of competent authorities to facilitate quality assurance, investigations, the European Quality Certificate referred to in Article 50, cooperation in inspections, contingency planning and administrative sanctions.
Amendment 494 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 2 a new (2a) ESMA shall be adequately staffed, with regard to capacity and expertise, and shall have adequate resources in order to be able to fulfil its tasks provided for in this Regulation.
Amendment 495 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 3 a (new) (3a) ESMA shall cooperate with the international bodies involved in the developing of the international standards and practices related to the carrying out of statutory audits.
Amendment 496 #
Proposal for a regulation Article 46 – paragraph 3 – subparagraph 1 – point e Amendment 497 #
Proposal for a regulation Article 46 – paragraph 3 – subparagraph 1 – point g a (new) (ga) common standards, best practices and enforcement activities for consistent enforcement of applicable accounting standards, especially impairment rules;
Amendment 498 #
Proposal for a regulation Article 46 – paragraph 3 – subparagraph 1 – point h – point i a (new) (ia) Common standards and best practices concerning the promotion and implementation of corporate social and environmental responsibility;
Amendment 499 #
Proposal for a regulation Article 52 Amendment 500 #
Proposal for a regulation 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 501 #
Proposal for a regulation Article 53 – paragraph 7 a (new) (7a) 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 502 #
Proposal for a regulation Article 61 – paragraph 3 3. This Article
Amendment 504 #
Proposal for a regulation Article 62 – paragraph 2 – point h a (new) (ha) an immediate end of the audit engagement concerned following the procedure of normal expiry of the maximum duration of engagement as described in article 33(2)
Amendment 505 #
Proposal for a regulation Article 63 Amendment 506 #
Proposal for a regulation Article 64 – paragraph 1 Every administrative measure or sanction imposed for breach of this Regulation shall be published without undue delay, including at least information on the type and nature of the breach
Amendment 507 #
Proposal for a regulation Article 64 – paragraph 2 Amendment 508 #
Proposal for a regulation Article 67 – paragraph 1 1. Competent and judicial authorities shall provide ESMA annually with aggregated information regarding all administrative measures, sanctions and fines imposed in accordance with Articles
Amendment 509 #
Proposal for a regulation Article 67 – paragraph 2 Amendment 510 #
Proposal for a regulation Article 69 a (new) Article 69a Report about ESMA The Commission shall by X X ( five years after the end of the transitional period) prepare a report on ESMA’s current and future role. The Commission shall assess whether ESMA has enough resources to fulfil its tasks according to this Regulation.
Amendment 511 #
Proposal for a regulation Article 69 a (new) Article 69a Report on ESMA The Commission shall by X X ( five years after the end of the transitional period) prepare a report on ESMA’s current and future role. The Commission shall assess whether ESMA has enough resources to fulfil its tasks according to this Regulation.
Amendment 512 #
Proposal for a regulation Article 69 – paragraph 1 By X X 20XX [five years after the end of the transitional period] the Commission shall prepare a report on the application of this
Amendment 513 #
Proposal for a regulation Article 69 – paragraph 1 a (new) Before X.X.20XX [two years after the entry into force of the Regulation], the Commission shall undertake an evaluation of the appropriateness of fees charged by statutory auditors or audit firms for the provision of statutory audits or audit firms for the provision of statutory audits of public-interest entities as well as their impact on the audit market structure, and shall present a report. In the light of that report, the Commission shall, if it considers it appropriate, take measures to address the potential issues identified.
Amendment 514 #
Proposal for a regulation Article 70 – paragraph 1 – subparagraph 1 – introductory part By derogation from Articles 32and 33, the following requirements shall apply to contracts for the provision of statutory audit to public-interest entities which are in force at [date of entry into force of this
Amendment 515 #
Proposal for a regulation Article 70 – paragraph 1 – subparagraph 1 – point a (a) any audit contract entered into before XX/XX/XXXX [the date of adoption of the Commission proposal] which is still in force on [the date of entry into force of this
Amendment 516 #
Proposal for a regulation Article 70 – paragraph 1 – subparagraph 1 – point b (b) any audit contract entered into after XX/XX/XXX [the adoption of the Commission proposal] but before
Amendment 517 #
Proposal for a regulation Article 70 – paragraph 1 – subparagraph 1 – point c – point vi – paragraph 1 By derogation from the criteria set out in point (c), the audit contract may remain applicable until the end of the first accounting year ending after [2 years after the entry into force of this
Amendment 518 #
Proposal for a regulation Article 70 – paragraph 2 – subparagraph 1 Article 33 shall apply to any audit contract entered into after […] [the date of the entry into force of this Regulation] but before […] [[2 years after the entry into force of this
Amendment 519 #
Proposal for a regulation Article 71 – paragraph 1 The Member States shall make such provision as is appropriate to ensure the effective application of this
Amendment 520 #
Proposal for a regulation Article 72 – paragraph 1 This
Amendment 521 #
Proposal for a regulation Article 72 – paragraph 3 However, Article 32(7) shall apply from […] [the date of the entry into force of the
Amendment 522 #
Proposal for a regulation Article 72 – paragraph 4 source: PE-498.135
2012/11/09
JURI
550 amendments...
Amendment 196 #
Draft legislative resolution Paragraph 1 1.
Amendment 197 #
Draft legislative resolution Paragraph 2 Amendment 198 #
Draft legislative resolution Paragraph 3 Amendment 199 #
Proposal for a regulation Title Amendment 200 #
Proposal for a regulation Recital 7 a (new) (7a) Where a cooperative within the meaning of Article 2(14), or a similar entity as referred to in Article 45 of Directive 86/635/EEC, a subsidiary or a legal successor, a savings bank or similar entity 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 in Chapter I 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 201 #
Proposal for a regulation Recital 8 (8) Adequate internal organisation of statutory auditors and audit firms should contribute to preventing any threats to their independence. Thus, owners or shareholders of an audit firm, as well as those managing it, should not intervene in the carrying out of a statutory audit in any way which jeopardises the independence and objectivity of the statutory auditor who carries out the statutory audit on behalf of the audit firm. Additionally, statutory auditors and audit firms should establish appropriate internal policies and procedures in relation to employees and other persons involved in the statutory audit activity within their organisations in order to ensure compliance with their statutory obligations. Those policies and procedures should in particular seek to prevent and address any threats to independence and ensure the quality, integrity and thoroughness of the statutory audit. Those policies and procedures should be proportionate in view of the scale and complexity of the business of the statutory auditor or audit firm and the audited entities.
Amendment 202 #
Proposal for a regulation Recital 11 (11) The provision of services other than statutory audit to audited entities by statutory auditors, audit firms or members
Amendment 203 #
Proposal for a regulation Recital 11 (11) The provision of services other than statutory audit to audited entities by statutory auditors, audit firms or members of their networks
Amendment 204 #
Proposal for a regulation 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
Amendment 205 #
Proposal for a regulation 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
Amendment 206 #
Proposal for a regulation 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
Amendment 207 #
Proposal for a regulation Recital 11 a (new) (11a) In order to promote cost control and efficiency among the entities being audited, firms providing the statutory audit shall not be prohibited from supplying the entity being audited with related financial audit services.
Amendment 208 #
Proposal for a regulation Recital 15 (15) The statutory audit results in an opinion on the truth and fairness of the financial statements of the audited entities. Stakeholders, however, might to be unaware of the limitations of an audit (materiality, sampling techniques, role of the auditor in the detection of fraud and the responsibility of managers), which can lead to an expectation gap. In order to reduce such gap, it is important to provide more clarity on what the scope of the statutory audit is. Therefore, more guidance is needed on a European level for statutory auditors as well as the preparers of accounts in this area, and in particular, to work towards a standardised definition, and usage, of the 'going concern' of a company.
Amendment 209 #
Proposal for a regulation Recital 22 Amendment 210 #
Proposal for a regulation Recital 23 Amendment 211 #
Proposal for a regulation 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
Amendment 212 #
Proposal for a regulation 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
Amendment 213 #
Proposal for a regulation Recital 24 Amendment 214 #
Proposal for a regulation 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
Amendment 215 #
Proposal for a regulation 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
Amendment 216 #
Proposal for a regulation Recital 24 (24) It is also important that the role of the audit committee in the selection of a new
Amendment 217 #
Proposal for a regulation 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
Amendment 218 #
Proposal for a regulation 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, 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
Amendment 219 #
Proposal for a regulation Recital 25 Amendment 220 #
Proposal for a regulation Recital 26 Amendment 221 #
Proposal for a regulation 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
Amendment 222 #
Proposal for a regulation 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
Amendment 223 #
Proposal for a regulation 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 smaller audit firms would facilitate the development of the capacity of such firms, thus contributing to increasing the choice
Amendment 224 #
Proposal for a regulation Recital 27 (27) In order to address the familiarity threat and therefore reinforce the independence of auditors and audit firms, it is important t
Amendment 225 #
Proposal for a regulation 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
Amendment 226 #
Proposal for a regulation Recital 27 (27) In order to address
Amendment 227 #
Proposal for a regulation 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.
Amendment 228 #
Proposal for a regulation Recital 27 (27) In order to address the familiarity threat and therefore reinforce the independence of auditors and audit firms,
Amendment 229 #
Proposal for a regulation Recital 27 a (new) (27a) There should also be regular and open tendering of the related financial audit services and non-audit services as it provides small and medium-sized statutory auditors, audit firms and non- audit related service providers to present their services and skills in a transparent process and to increase their visibility as service providers for public-interest entities. The incumbent auditor does not necessarily have to perform related financial audit and non-audit services and so the tendering process strongly encourages audit committees to consider a broader range of prospective providers of audit and non-audit services. The purpose of tendering both financial audit related services and non-audit services is to not only evaluate the incumbent provider's performance but also the requirements of the audited entity.
Amendment 230 #
Proposal for a regulation Recital 28 Amendment 231 #
Proposal for a regulation 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 232 #
Proposal for a regulation Recital 36 (36) The cooperation between the competent authorities of the Member States
Amendment 233 #
Proposal for a regulation Recital 36 (36) The cooperation between the competent authorities of the Member States can make an important contribution to ensuring consistently high quality in the statutory audit in the Union. Therefore, the competent authorities of the Member States should cooperate with each other, where necessary, for the purpose of carrying out their supervisory duties regarding statutory audits. They should respect the principle of home-country regulation and oversight by the Member State in which the statutory auditor or audit firm is approved and the audited entity has its registered office.
Amendment 234 #
Proposal for a regulation 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 235 #
Proposal for a regulation Recital 38 Amendment 236 #
Proposal for a regulation Recital 40 (40) Sustainable audit capacity and a competitive market for statutory audit services in which there is a sufficient choice of audit firms capable of carrying out statutory audits of public-interest entities are required in order to ensure a smooth functioning of capital markets.
Amendment 237 #
Proposal for a regulation Recital 41 Amendment 238 #
Proposal for a regulation Recital 43 (43) In order to take account of developments in auditing and the audit market, the Commission should be
Amendment 239 #
Proposal for a regulation Recital 44 (44) In order to take account of the technical developments in the financial markets, in auditing and the audit profession and to specify the requirements laid down in this Regulation, the Commission should be empowered to adopt
Amendment 240 #
Proposal for a regulation Recital 45 (45) In order to ensure legal certainty and the smooth transition to the regime introduced by this Regulation, it is important to introduce a transitional regime regarding the entry into force of
Amendment 241 #
Proposal for a regulation Recital 45 (45) In order to ensure legal certainty and the smooth transition to the regime introduced by this Regulation, it is important to introduce a transitional regime regarding the entry into force of
Amendment 242 #
Proposal for a regulation 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) (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) (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) (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 246 #
Proposal for a regulation Article 2 – paragraph 1 – point b a (new) (ba) Member States may exempt public interest entities which have not issued transferable securities admitted to trading on a regulated market within the meaning of point 14 of Article 4(1) of Directive 2004/39/EC and their statutory auditor(s) or audit firm(s) from one or more of the requirements of this regulation.
Amendment 247 #
Proposal for a regulation Article 2 – paragraph 1 a (new) 1a. Member States may exempt public- interest entities which have not issued transferable securities admitted to trading on a regulated market within the meaning of point 14 of Article 4(1) of Directive 2004/39/EC and their statutory auditor(s) or audit firm(s) from one or more of the requirements of this Regulation.
Amendment 248 #
Proposal for a regulation Article 3 – paragraph 1 For the purposes of this Regulation, the definitions laid down in Article 2 of Directive 2006/43/EC shall apply, except
Amendment 249 #
Proposal for a regulation Article 3 – paragraph 1 For the purposes of this Regulation, the definitions laid down in Article 2 of Directive 2006/43/EC shall apply, except for the definition
Amendment 250 #
Proposal for a regulation Article 5 Amendment 251 #
Proposal for a regulation 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 252 #
Proposal for a regulation Article 5 – paragraph 1 a (new) (1a) Where a cooperative 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 Directive 86/635/EEC, a subsidiary or a legal successor of a cooperative, a savings bank or a similar entity 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 254 #
Proposal for a regulation Article 6 – paragraph 1 – subparagraph 1 – point d (d) a statutory auditor or an audit firm shall establish adequate policies and procedures to ensure that outsourcing of important audit functions is not undertaken in such a way as to impair the quality of the statutory auditor’s or audit firm’s internal control and the ability of the competent
Amendment 255 #
Proposal for a regulation Article 6 – paragraph 1 – subparagraph 1 – point j (j) a statutory auditor or an audit firm shall have adequate remuneration policies providing sufficient performance incentives to secure audit quality. In particular, the compensation and performance evaluation of employees, including key audit partners, shall not be contingent on the amount of revenue that the statutory auditor or the audit firm derives from
Amendment 257 #
Proposal for a regulation Article 7 – paragraph 4 4. Persons or firms referred to in paragraph 2 shall not solicit or accept
Amendment 258 #
Proposal for a regulation Article 8 – paragraph 1 – introductory part 1.
Amendment 259 #
Proposal for a regulation Article 8 – paragraph 1 – point a (a) take up a key management position in the audited entity
Amendment 260 #
Proposal for a regulation Article 8 – paragraph 1 – point b (b) become a member of the audit committee of the audited entity or of an entity linked to it or, where such committee does not exist, of the body performing equivalent functions to an audit committee;
Amendment 261 #
Proposal for a regulation Article 8 – paragraph 1 – point c (c) become a non-executive member of the administrative body or a member of the supervisory body of the audited entity or of an entity linked to it.
Amendment 262 #
Proposal for a regulation 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
Amendment 263 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 264 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 265 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 266 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 267 #
Proposal for a regulation Article 9 – paragraph 2 Amendment 268 #
Proposal for a regulation 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, other than fees for such of those services which are required by law, shall be limited to no more than 1
Amendment 269 #
Proposal for a regulation 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
Amendment 270 #
Proposal for a regulation 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
Amendment 271 #
Proposal for a regulation 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 272 #
Proposal for a regulation Article 9 – paragraph 3 a (new) 3a. Where Article 37 (2) of Directive 2006/43/EC applies paragraph 2 and 3 of this Article shall not apply.
Amendment 273 #
Proposal for a regulation Article 9 – paragraph 3 – subparagraph 1 When the total fees received from a public- interest entity subject to the statutory audit represent, for two consecutive years, either more than 2
Amendment 274 #
Proposal for a regulation Article 9 – paragraph 3 – subparagraph 1 When the total fees received from a public- interest entity subject to the statutory audit represent either more than 20 % or, for two consecutive years, more than 15 % of the of the total annual fees received by the statutory auditor or audit firm carrying out the statutory audit, such auditor or firm shall disclose to the
Amendment 275 #
Proposal for a regulation Article 9 – paragraph 3 – subparagraph 3 Amendment 276 #
Proposal for a regulation Article 9 – paragraph 3 a (new) 3a. Where Article 37 (2) of Directive 2006/43/EC applies paragraph 2 and 3 of this Article shall not apply.
Amendment 278 #
Proposal for a regulation Article 10 – title Pro
Amendment 279 #
Proposal for a regulation 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
Amendment 280 #
Proposal for a regulation 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 not prohibited under this Article.
Amendment 281 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 1 A statutory auditor or an audit firm carrying out statutory audit of public- interest entities may not provide to the audited entity, to its parent undertaking and to its controlled undertakings statutory audit services and related financial audit services.
Amendment 282 #
Proposal for a regulation 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, 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 283 #
Proposal for a regulation 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
Amendment 284 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 Amendment 285 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 Where the statutory auditor belongs to a network, a member of such a 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 non-audit services not prohibited under this Article.
Amendment 286 #
Proposal for a regulation Article 10 – paragraph 1 – subparagraph 2 Where the statutory auditor belongs to a network, a member of such network may not provide to the audited entity, to its parent undertaking and to its controlled
Amendment 287 #
Proposal for a regulation 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, 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 Where the statutory auditor belongs to a network, a member of such network may
Amendment 289 #
Proposal for a regulation 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) Member States should encourage engaging small and medium-size audit firms for auditing accounts of the public institutions and state owned companies.
Amendment 291 #
Proposal for a regulation Article 10 – paragraph 2 – introductory part 2. For the purposes of this Article, related financial audit services shall mean in particular:
Amendment 292 #
Proposal for a regulation Article 10 – paragraph 2 – introductory part 2. For the purposes of this Article, related financial audit services
Amendment 293 #
Proposal for a regulation Article 10 – paragraph 2 – point e (e) providing certification on compliance with tax requirements
Amendment 294 #
Proposal for a regulation 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 295 #
Proposal for a regulation 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 296 #
Proposal for a regulation Article 10 – paragraph 2 – point e b (new) (eb) audit of occupational pension schemes and pension obligations;
Amendment 297 #
Proposal for a regulation 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) (ec) audit of occupational pension schemes and pension obligations;
Amendment 299 #
Proposal for a regulation Article 10 – paragraph 2 – point f (f) any other statutory duty related to audit work imposed by
Amendment 300 #
Proposal for a regulation 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 301 #
Proposal for a regulation Article 10 – paragraph 2 – point f a (new) (fa) an audit of the financial information of a group component, an audit of one or more account balances, classes of transactions or disclosures relating to the likely significant risks of material misstatement of the group financial statements; specified audit procedures relating to the likely significant risks of material misstatement of the group financial statements.
Amendment 302 #
Proposal for a regulation 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;
Amendment 303 #
Proposal for a regulation 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 304 #
Proposal for a regulation Article 10 – paragraph 2 a (new) 2a. Non-audit services provided by the statutory auditor shall be stated in the statutory audit of the audited entity, its parent undertaking and its controlled undertakings. The list shall outline the extent and characteristics of those non-audit services provided.
Amendment 306 #
Proposal for a regulation 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 307 #
Proposal for a regulation 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 308 #
Proposal for a regulation 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
Amendment 309 #
Proposal for a regulation 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 Amendment 311 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 2 Where the statutory auditor belongs to a network, no member of such a network shall provide to the audited entity, to its parent undertaking and to its controlled undertakings within the Union any prohibited non-
Amendment 312 #
Proposal for a regulation 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-
Amendment 313 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article, non-audit services shall mean
Amendment 314 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article, prohibited non-audit services shall mean:
Amendment 315 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article, non-audit services shall mean in particular:
Amendment 316 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article, prohibited non-audit services shall mean:
Amendment 317 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – introductory part For the purposes of this Article, non-audit services shall mean in particular:
Amendment 318 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point i Amendment 319 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point i Amendment 320 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point i (i)
Amendment 321 #
Proposal for a regulation 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 322 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii (iii) designing and implementing internal control or risk management
Amendment 323 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii (iii) designing
Amendment 324 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iii (iii) designing
Amendment 325 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv (iv) valuation services, providing fairness opinions or contribution-in-kind reports, where the valuation would have a material effect, separately or in the aggregate, on the financial statements;
Amendment 326 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv (iv) valuation services
Amendment 327 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv (iv)
Amendment 328 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv (iv) valuation services
Amendment 329 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point iv (iv) valuation services
Amendment 330 #
Proposal for a regulation 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 331 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point v a (new) (va) legal or tax advisory services that extend beyond the presentation of structuring alternatives and that would have a direct and material impact on the financial statements to be audited;
Amendment 332 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi Amendment 333 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi (vi) designing and implementing financial information technology systems for public- interest entities
Amendment 334 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi (vi) designing and implementing financial information technology systems
Amendment 335 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi (vi) designing
Amendment 336 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi (vi) designing and implementing financial information technology systems for public- interest entities
Amendment 337 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vi (vi) designing
Amendment 338 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point vii a (new) (viia) payroll services;
Amendment 339 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii Amendment 340 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii (viii)
Amendment 341 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new) (viiia) human resources services, including recruiting senior management;
Amendment 342 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new) (viiia) human resources services, including recruiting senior management;
Amendment 343 #
Proposal for a regulation 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 344 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new) (viiia) human resources services, including recruiting senior management;
Amendment 345 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii a (new) (viiia) general management consultancy services
Amendment 346 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii b (new) (viiib) 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 347 #
Proposal for a regulation 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 348 #
Proposal for a regulation 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 10 – paragraph 3 – subparagraph 3 – point a – point viii b (new) (viiib) tax consultancy and advising services
Amendment 350 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii c (new) (viiic) promoting, dealing in, or underwriting client shares;
Amendment 351 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point a – point viii c (new) Amendment 352 #
Proposal for a regulation 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 353 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b Amendment 354 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b Amendment 355 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b Amendment 356 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point i Amendment 357 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point i (i) human resources services, including recruiting senior management in a position to exert significant influence over the preparation of the accounting records or financial statements subject to the statutory audit;
Amendment 358 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point i (i) human resources services
Amendment 359 #
Proposal for a regulation 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 Amendment 361 #
Proposal for a regulation 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) (iia) fairness opinions
Amendment 363 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point iii Amendment 364 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point iii Amendment 365 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point iv Amendment 366 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 – point b – point iv (iv) due diligence services to the vendor
Amendment 367 #
Proposal for a regulation 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 368 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 3 a (new) A statutory auditor or audit firm may provide non-audit services other than services prohibited under paragraph 3 of this Article where the provision of those services has been approved by the audit committee and the competent authority has not exercised its power to prohibit the provision of the services in question.
Amendment 369 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 370 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 371 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 372 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 373 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 374 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 Amendment 375 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 4 By derogation from the first and second subparagraphs, the services mentioned in point (b)
Amendment 376 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 377 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 378 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 379 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 380 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 381 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 Amendment 382 #
Proposal for a regulation Article 10 – paragraph 3 – subparagraph 5 By derogation from the first and second subparagraphs, the services mentioned in point (b)
Amendment 383 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 1 Amendment 384 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 2 Amendment 385 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 3 Amendment 386 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 3 Amendment 387 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 3 Being involved in the decision-taking of the audited entity
Amendment 388 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 3 Being involved in the decision-taking of the audited entity and the provision of
Amendment 389 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 4 Amendment 390 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 4 Amendment 391 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 4 Amendment 392 #
Proposal for a regulation Article 10 – paragraph 4 – subparagraph 5 Amendment 393 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 394 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 395 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 396 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 397 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 398 #
Proposal for a regulation Article 10 – paragraph 5 Amendment 399 #
Proposal for a regulation 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
Amendment 400 #
Proposal for a regulation Article 10 – paragraph 5 – point a Amendment 401 #
Proposal for a regulation 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 Amendment 403 #
Proposal for a regulation 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 Amendment 405 #
Proposal for a regulation 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 Amendment 407 #
Proposal for a regulation Article 10 – paragraph 5 – point e Amendment 408 #
Proposal for a regulation Article 10 – paragraph 6 Amendment 409 #
Proposal for a regulation Article 10 – paragraph 6 Amendment 410 #
Proposal for a regulation Article 10 – paragraph 6 Amendment 411 #
Proposal for a regulation Article 10 – paragraph 6 6. The Commission shall be empowered to adopt delegated acts in accordance with Article 68 for the purpose of adapting the list of related financial audit services referred to in paragraph 2 and the list of prohibited non-audit services referred to in paragraph 3 of this Article. When using such powers, the Commission shall take into account developments in auditing and the audit profession.
Amendment 412 #
Proposal for a regulation Article 10 – paragraph 6 6.
Amendment 413 #
Proposal for a regulation 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 415 #
Proposal for a regulation Article 11 – paragraph 3 Amendment 416 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point a (a) confirm annually in writing to the
Amendment 417 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point b (b) confirm annually in writing to the
Amendment 418 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point c (c) request permission from the
Amendment 419 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point c (c) request permission from the audit committee to provide
Amendment 420 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point d Amendment 421 #
Proposal for a regulation Article 11 – paragraph 4 – subparagraph 1 – point e (e) discuss with the
Amendment 422 #
Proposal for a regulation Article 13 – paragraph 1 – subparagraph 1 Where a statutory auditor or an audit firm
Amendment 423 #
Proposal for a regulation 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
Amendment 424 #
Proposal for a regulation Article 15 – paragraph 2 The statutory auditor or the audit firm shall maintain professional scepticism in particular when reviewing management estimates relating to
Amendment 425 #
Proposal for a regulation Article 16 – paragraph 5 – subparagraph 1 – point c (c) an audit plan setting out the probable scope and method of the statutory audit
Amendment 426 #
Proposal for a regulation Article 16 – paragraph 5 – subparagraph 1 – point c (c) an audit plan setting out the probable scope and method of the statutory audit
Amendment 427 #
Proposal for a regulation 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 429 #
Proposal for a regulation Article 20 – paragraph 1 The statutory auditor(s) or the audit firm(s) shall comply with the international auditing standards
Amendment 430 #
Proposal for a regulation 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
Amendment 431 #
Proposal for a regulation 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
Amendment 432 #
Proposal for a regulation Article 20 – paragraph 1 Amendment 433 #
Proposal for a regulation 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) - 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 2. The audit report shall be in writing and in digital form. It shall at least:
Amendment 437 #
Proposal for a regulation Article 22 – paragraph 2 – point b (b)
Amendment 438 #
Proposal for a regulation Article 22 – paragraph 2 – point c (c)
Amendment 439 #
Proposal for a regulation Article 22 – paragraph 2 – point c a (new) (ca) report on - whether the management report has been prepared in accordance with the applicable legal requirements - whether according to the auditor's knowledge and understanding of the undertaking and its environment obtained during the course of the audit, the management report as a whole suitably presents the undertaking's position, the opportunities and principal risks and uncertainties of its likely future development.
Amendment 440 #
Proposal for a regulation Article 22 – paragraph 2 – point e Amendment 441 #
Proposal for a regulation Article 22 – paragraph 2 – point f a (new) Amendment 442 #
Proposal for a regulation Article 22 – paragraph 2 – point f a (new) Amendment 443 #
Proposal for a regulation 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 444 #
Proposal for a regulation Article 22 – paragraph 2 – point h (h) describe the used methodology,
Amendment 445 #
Proposal for a regulation Article 22 – paragraph 2 – point l (l) provide a statement on the situation of the audited entity or, in case of the statutory audit of consolidated financial statements, of the parent undertaking and
Amendment 446 #
Proposal for a regulation 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 447 #
Proposal for a regulation Article 22 – paragraph 2 – point q (q) declare that the prohibited non-audit services referred to in Article 10(3) were not provided and that the statutory auditor(s) or the audit firm(s) remained completely independent in conducting the audit. Where the statutory audit was carried out by an audit firm, the report shall identify each member of the audit engagement team and shall state that all members remained completely independent and had no direct or indirect interest in the audited entity;
Amendment 448 #
Proposal for a regulation Article 22 – paragraph 2 – point r (r) indicate the non-audit services other than those referred to in Article 10(3)
Amendment 449 #
Proposal for a regulation Article 22 – paragraph 2 – point s Amendment 450 #
Proposal for a regulation Article 22 – paragraph 2 – point t (t) give an opinion which shall state clearly the opinion of the statutory auditor(s) or the audit firm(s) as to whether the annual or consolidated financial statements as well as the management report give a true and fair view and have been prepared in accordance with the relevant financial reporting framework and, where appropriate, whether the annual or consolidated financial statements as well as the management report comply with statutory requirements; the audit opinion shall be either un
Amendment 451 #
Proposal for a regulation Article 22 – paragraph 2 – point t (t) give an opinion which shall state clearly the opinion of the statutory auditor(s) or the audit firm(s) as to whether the annual or consolidated financial statements give a true and fair view and have been prepared in accordance with the relevant financial
Amendment 452 #
Proposal for a regulation Article 22 – paragraph 2 – point t (t) give an opinion which shall state clearly the opinion of the statutory auditor(s) or the audit firm(s) as to whether the annual or consolidated financial statements give a true and fair view and have been prepared in accordance with the relevant financial and asset-related reporting framework and, where appropriate, whether the annual or consolidated financial statements comply with statutory requirements; the audit opinion shall be either unqualified, qualified, an adverse opinion or, if the statutory auditor(s) or audit firm(s) are unable to express an audit opinion, a
Amendment 453 #
Proposal for a regulation Article 22 – paragraph 2 – point w Amendment 454 #
Proposal for a regulation 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 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 456 #
Proposal for a regulation Article 22 – paragraph 4 Amendment 457 #
Proposal for a regulation 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 458 #
Proposal for a regulation Article 22 – paragraph 6 Amendment 459 #
Proposal for a regulation Article 23 – title Additional report to the
Amendment 460 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 1 The statutory auditor(s) or the audit firm(s)
Amendment 461 #
Proposal for a regulation 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
Amendment 462 #
Proposal for a regulation 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 463 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 1 a (new) The statutory auditor(s) or the audit firm(s) carrying out statutory audit of credit institutions and insurance undertakings, in accordance with Article 16 of Regulation (EU) No 1093/2010 and of Regulation (EU) No 1094/2010, respectively shall also submit the additional report to the EBA, EIOPA and the ESRB.
Amendment 464 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 2 Amendment 465 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 3 The
Amendment 466 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 4 The additional report shall be disclosed to the general meeting of the audited entity
Amendment 467 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 4 The additional report shall be disclosed to the general meeting of the audited entity if the
Amendment 468 #
Proposal for a regulation Article 23 – paragraph 1 – subparagraph 4 The additional report shall be disclosed to the general meeting of the audited entity if the
Amendment 469 #
Proposal for a regulation Article 23 – paragraph 2 – introductory part 2. The additional report to the
Amendment 470 #
Proposal for a regulation Article 23 – paragraph 2 – point a (a) include a declaration of independence
Amendment 471 #
Proposal for a regulation Article 23 – paragraph 2 – point a a (new) (aa) if not already disclosed in the management report or the annual financial statements for the same financial year, indicate the date of the appointment of the statutory auditor(s) or the audit firm and the period of total uninterrupted engagement including previous renewals and reappointments of the statutory auditor(s) or the audit firm;
Amendment 472 #
Proposal for a regulation Article 23 – paragraph 2 – point b (b) identify the dates of the meetings with the audit committee
Amendment 473 #
Proposal for a regulation Article 23 – paragraph 2 – point c (c) identify the dates of the meetings, if any, with the management
Amendment 474 #
Proposal for a regulation Article 23 – paragraph 2 – point e (e) describe the distribution of tasks among the statutory auditor(s)
Amendment 475 #
Proposal for a regulation Article 23 – paragraph 2 – point e (e) describe the distribution of tasks among the statutory auditor(s)s and/or the audit firm(s)
Amendment 476 #
Proposal for a regulation 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 477 #
Proposal for a regulation Article 23 – paragraph 2 – point e a (new) Amendment 478 #
Proposal for a regulation 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 479 #
Proposal for a regulation Article 23 – paragraph 2 – point h (h) indicate and explain in detail all instances of non-compliance, including non-material instances as far as it is considered to be important to the
Amendment 480 #
Proposal for a regulation Article 23 – paragraph 2 – point h a (new) Amendment 481 #
Proposal for a regulation Article 23 – paragraph 2 – point j Amendment 482 #
Proposal for a regulation 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) (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) (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 485 #
Proposal for a regulation Article 23 – paragraph 2 a (new) 2a. The statutory auditor or audit firm has to discuss the additional report with the audit committee.
Amendment 486 #
Proposal for a regulation Article 23 – paragraph 3 3. In case of disagreement between the appointed statutory auditors or audit firms on auditing procedures, accounting rules or any other issue regarding the conduct of the statutory audit, the reasons for such disagreement shall be explained in the additional report to the
Amendment 487 #
Proposal for a regulation Article 23 – paragraph 4 4. The additional report to the
Amendment 488 #
Proposal for a regulation Article 23 – paragraph 5 Amendment 489 #
Proposal for a regulation Article 23 – paragraph 5 5.
Amendment 490 #
Proposal for a regulation 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 491 #
Proposal for a regulation Article 24 – title Oversight of the statutory audit by the
Amendment 492 #
Proposal for a regulation Article 24 – title Amendment 493 #
Proposal for a regulation Article 24 – paragraph 1 The audit committee of the public-interest entity shall monitor the work of the statutory auditor(s) or audit firm(s) carrying out the statutory audit, and, when more than one statutory auditor or audit firm have been appointed, the distribution of tasks between them and their rotation.
Amendment 494 #
Proposal for a regulation Article 24 – paragraph 1 The
Amendment 495 #
Proposal for a regulation Article 24 – paragraph 1 The audit committee of the public-interest entity shall monitor the work of the statutory auditor(s) or audit firm(s) carrying out the statutory audit and, when more than one statutory auditor or audit firm have been appointed, the distribution of tasks between them and their rotation.
Amendment 496 #
Proposal for a regulation Article 24 – paragraph 1 The audit committee of the public-interest entity shall
Amendment 497 #
Proposal for a regulation Article 24 – paragraph 2 The statutory auditor(s) or audit firm(s) shall report to the
Amendment 498 #
Proposal for a regulation 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
Amendment 499 #
Proposal for a regulation Article 24 – paragraph 4 Amendment 500 #
Proposal for a regulation Article 24 – paragraph 4 In
Amendment 501 #
Proposal for a regulation 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
Amendment 502 #
Proposal for a regulation Article 25 – paragraph 1 – subparagraph 2 The statutory auditor or the audit firm shall also have a duty to report any
Amendment 504 #
Proposal for a regulation 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
Amendment 505 #
Proposal for a regulation 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
Amendment 507 #
Proposal for a regulation Article 27 – paragraph 2 – subparagraph 1 – point k a (new) (k a) a statement on the official CSR policy of the statutory auditor
Amendment 509 #
Proposal for a regulation 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 510 #
Proposal for a regulation Article 29 Amendment 511 #
Proposal for a regulation Article 29 – title Amendment 512 #
Proposal for a regulation 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 513 #
Proposal for a regulation Article 30 Amendment 515 #
Proposal for a regulation 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
Amendment 516 #
Proposal for a regulation Article 31 – paragraph 1 – subparagraph 2 At least
Amendment 517 #
Proposal for a regulation Article 31 – paragraph 1 – subparagraph 2 a (new) All members of the audit committee shall take part in skill enhancement programmes in order to ensure an adequate technical knowledge level to fulfil their task.
Amendment 518 #
Proposal for a regulation Article 31 – paragraph 1 – subparagraph 3 Amendment 519 #
Proposal for a regulation Article 31 – paragraph 1 – subparagraph 3 a (new) The responsibilities of the audit committee shall include discussing the statutory audit and the outcome thereof in such a way that its members can form their own judgment concerning the quality of that audit.
Amendment 520 #
Proposal for a regulation 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 521 #
Proposal for a regulation 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 (b) monitor the effectiveness of the undertaking's internal control, internal audit where applicable, and risk management systems
Amendment 523 #
Proposal for a regulation Article 31 – paragraph 5 – point c (c) monitor the statutory audit of the annual and consolidated financial statements and supervise the
Amendment 524 #
Proposal for a regulation Article 31 – paragraph 5 – point c (c) monitor the statutory audit of the annual and consolidated financial statements and
Amendment 525 #
Proposal for a regulation Article 31 – paragraph 5 – point d (d) review and monitor the independence of the statutory auditor
Amendment 526 #
Proposal for a regulation 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 527 #
Proposal for a regulation Article 31 – paragraph 5 – point f (f) authorise, on a case by case basis, preparation of a decision by the supervisory or administrative body on the provision by the statutory auditor or audit firm of the services referred to in Article 10(3)(b)(i) and (ii) of this Regulation to the audited entity.
Amendment 528 #
Proposal for a regulation Article 31 – paragraph 5 – point f f) authorise, on a case by case basis, the provision by the statutory auditor or audit firm of the non-audit services referred to in Article 10
Amendment 530 #
Proposal for a regulation Article 32 – paragraph 1 – subparagraph 1 For the purposes of the application of Article 37 (1) of Directive 2006/43/EC, for the appointment of statutory auditors or audit firms by public-interest entities, the conditions set out in paragraphs 2 to
Amendment 531 #
Proposal for a regulation 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 532 #
Proposal for a regulation 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
Amendment 533 #
Proposal for a regulation Article 32 – paragraph 2 – subparagraph 2 Unless it concerns the renewal of an audit engagement in accordance with the second subparagraph of Article 33(1), the recommendation shall contain at least t
Amendment 534 #
Proposal for a regulation 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
Amendment 535 #
Proposal for a regulation 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 536 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – introductory part Amendment 537 #
Proposal for a regulation 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
Amendment 538 #
Proposal for a regulation 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 one who received more than 15% of the total audit fees from
Amendment 539 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point a (a)
Amendment 540 #
Proposal for a regulation 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 541 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point b (b) the audited entity shall
Amendment 542 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point b (b) the audit
Amendment 543 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point c (c) the audit
Amendment 544 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point d (d) the audit
Amendment 545 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point f (f) the audit committee
Amendment 546 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 1 – point g (g) the audit
Amendment 547 #
Proposal for a regulation Article 32 – paragraph 3 – subparagraph 2 Amendment 548 #
Proposal for a regulation 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 549 #
Proposal for a regulation 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 2
Amendment 550 #
Proposal for a regulation 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 551 #
Proposal for a regulation 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 or which have appointed two statutory auditors or audit firms shall not be required to apply the selection procedure referred to in paragraph 4.
Amendment 552 #
Proposal for a regulation Article 32 – paragraph 5 – subparagraph 1 The proposal of the administrative or supervisory board to the general meeting of shareholders or members of the audited entity for the appointment of statutory auditors or audit firms shall include the recommendation made by the audit committee. The proposal to the general meeting shall be accompanied by the results of the comprehensive assessment referred to in Article 32 (2) and (3).
Amendment 553 #
Proposal for a regulation Article 32 – paragraph 5 – subparagraph 2 a (new) Where more than one statutory auditor or audit firm have been appointed, the public-interest entity shall apply the procedure referred to in paragraph 3 at least every other renewal.
Amendment 554 #
Proposal for a regulation Article 32 – paragraph 6 – subparagraph 1 Amendment 555 #
Proposal for a regulation 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 556 #
Proposal for a regulation Article 32 – paragraph 7 a (new) 7a. After the statutory auditor has been selected by the general meeting of members or shareholders, the non- executive members of the administrative body or the supervisory body, in consultation with the entity’s audit committee, shall issue the audit assignment.
Amendment 558 #
Proposal for a regulation 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 t
Amendment 559 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 The public-interest entity shall appoint a statutory auditor or audit firm for an
Amendment 560 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 The public-interest entity shall appoint a statutory auditor or audit firm for a
Amendment 561 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 The public-interest entity shall appoint a statutory auditor or audit firm for an
Amendment 562 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 1 The public-interest entity shall appoint at least one statutory auditor or audit firm for an
Amendment 563 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 Amendment 564 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 Amendment 565 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 Amendment 566 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 Amendment 567 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew this engagement
Amendment 568 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew th
Amendment 569 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew th
Amendment 570 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew this engagement
Amendment 571 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The
Amendment 572 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 2 The public-interest entity may renew th
Amendment 573 #
Proposal for a regulation 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 574 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 575 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 576 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 577 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 578 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 579 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of the combined two engagements shall not exceed
Amendment 580 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 581 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of the combined t
Amendment 582 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of the
Amendment 583 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of
Amendment 584 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 Amendment 585 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 3 The maximum duration of the combined two engagements shall not exceed
Amendment 586 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 587 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 588 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 589 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 590 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 591 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 592 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Amendment 593 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Where throughout a continuous engagement of
Amendment 594 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Where
Amendment 595 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 Where
Amendment 596 #
Proposal for a regulation Article 33 – paragraph 1 – subparagraph 4 a (new) Prior to reappointment, the entity’s supervisory or administrative body, in consultation with the audit committee, shall consider whether the statutory auditor's performance has met statutory requirements and whether reappointment should be recommended. The entity’s supervisory or administrative body shall disclose its assessment criteria.
Amendment 597 #
Proposal for a regulation 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 598 #
Proposal for a regulation Article 33 – paragraph 1 a (new) 1 a. For the purposes of the application of Article 37 (1) of Directive 2006/43/EC, for the appointment of statutory auditors or audit firms by public-interest entities, the conditions set out in paragraphs 2 to 7 shall apply. Where Article 37 (2) of Directive 2006/43/EC applies paragraphs 2 to 4 of this Article shall not apply.
Amendment 599 #
Proposal for a regulation Article 33 – paragraph 1 a (new) 1 a. The audit committee shall consider whether or not to initiate a tendering process for the statutory audit following the conditions set out in Article 32.
Amendment 600 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 601 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 602 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 603 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 604 #
Proposal for a regulation Article 33 – paragraph 2 Amendment 605 #
Proposal for a regulation Article 33 – paragraph 2 2.
Amendment 606 #
Proposal for a regulation Article 33 – paragraph 2 a (new) 2a. By way of derogation from paragraphs 1 and 2, the same statutory auditor or audit firm may be re-engaged by the following entities, provided that they are not among a Member State’s twenty largest issuers of shares as measured by market capitalisation on the basis of end- year quotes: (a) issuers of shares with a market capitalisation of less than EUR 1 billion on the basis of end-year quotes for the previous three calendar years; (b) credit institutions which, in addition, meet at least two of the following three criteria: - an average number of employees during the financial year of fewer than 250 persons; - a total balance sheet not exceeding EUR 43 million; - an annual net turnover not exceeding EUR 50 million.
Amendment 607 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 608 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 609 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 610 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 611 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 612 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 613 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 614 #
Proposal for a regulation Article 33 – paragraph 3 Amendment 615 #
Proposal for a regulation 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.
Amendment 616 #
Proposal for a regulation 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
Amendment 617 #
Proposal for a regulation 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
Amendment 618 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 The statutory auditor or audit firm shall establish a
Amendment 619 #
Proposal for a regulation 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 person
Amendment 620 #
Proposal for a regulation Article 33 – paragraph 4 – subparagraph 2 The statutory auditor or audit firm shall
Amendment 621 #
Proposal for a regulation 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 622 #
Proposal for a regulation Article 33 – paragraph 5 – subparagraph 2 Amendment 623 #
Proposal for a regulation Article 33 – paragraph 5 – subparagraph 2 The former statutory auditor or audit firm shall also grant access to the incoming statutory auditor(s) or audit firm(s) to the additional reports to the audit committee referred to in Article 23 of previous years and to any information transmitted to competent authorities pursuant to Articles 25 and 27.
Amendment 624 #
Proposal for a regulation Article 33 – paragraph 5 – subparagraph 3 Amendment 625 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 1 Amendment 626 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 1 ESMA or the Commission shall develop draft regulatory or implementing technical standards to specify technical requirements on the performance of statutory audits by more than one statutory auditor or audit firm including the balanced allocation of tasks among the statutory auditors or audit firms, the rotation of tasks referred to in paragraph 1, the independence of key audit partners and the most senior personnel involved in the statutory audit when rotation occurs, and the content of the handover file referred to in paragraph
Amendment 627 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 1 ESMA shall develop draft regulatory technical standards to specify technical requirements on the performance of statutory audits by more than one statutory auditor or audit firm including the rotation of tasks referred to in paragraph 1 and the content of the handover file referred to in paragraph
Amendment 628 #
Proposal for a regulation 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 629 #
Proposal for a regulation Article 33 – paragraph 6 – subparagraph 2 Amendment 630 #
Proposal for a regulation Article 34 Amendment 631 #
Proposal for a regulation 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 632 #
Proposal for a regulation Article 34 – paragraph 2 – subparagraph 1 Amendment 633 #
Proposal for a regulation Article 34 – paragraph 2 – subparagraph 1 The
Amendment 636 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 1 Each Member State shall designate
Amendment 637 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 1 Amendment 638 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 2 – introductory part The competent authority/authorities shall be one of the following:
Amendment 639 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 2 – introductory part The
Amendment 640 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 2 – point c (c) the competent authorit
Amendment 641 #
Proposal for a regulation Article 35 – paragraph 1 – subparagraph 2 – point c (c) the competent authorit
Amendment 642 #
Proposal for a regulation Article 35 – paragraph 2 – introductory part 2.
Amendment 643 #
Proposal for a regulation Article 35 – paragraph 3 Amendment 644 #
Proposal for a regulation Article 35 – paragraph 5 5. The
Amendment 645 #
Proposal for a regulation Article 35 – paragraph 6 – subparagraph 1 The Member States shall inform each other, EBA, EIPA and ESMA in accordance with the relevant provisions of Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010, and shall inform the EGAOB and the Commission of the appointment of competent authorities for the purposes of this Regulation.
Amendment 646 #
Proposal for a regulation Article 35 – paragraph 6 – subparagraph 2 Amendment 647 #
Proposal for a regulation Article 35 a (new) Article 35 a Article 35a Principles of public oversight With regard to public oversight over statutory auditors and audit firms for public-interest entities, the principles of public oversight under Directive 2006/43/EC of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, in particular Chapter VIII thereof, shall apply.
Amendment 648 #
Proposal for a regulation Article 36 Amendment 649 #
Proposal for a regulation Article 36 – paragraph 1 The European Auditing Activities Supervisory Authority, the competent authorities and any authority to which the competent authority referred to in Article 35(1) has delegated tasks shall be independent of statutory auditors and audit firms.
Amendment 650 #
Proposal for a regulation 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) 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) In all circumstances the competent authorities could not receive funds from the auditors or from their professional bodies.
Amendment 653 #
Proposal for a regulation Article 37 Amendment 654 #
Proposal for a regulation Article 37 – paragraph 1 The obligation of professional secrecy shall apply to all persons who are or have been employed by the European Auditing Activities Supervisory Authority and by the competent authorities or
Amendment 656 #
Proposal for a regulation Article 38 – title Powers of
Amendment 657 #
Proposal for a regulation Article 38 – paragraph 1 1. Without prejudice to Articles 40 and 41, in carrying out their tasks under this Regulation, the European Auditing Activities Supervisory Authority or the competent authorities or any other public authorities of a Member State may not interfere with the content of audit reports.
Amendment 658 #
Proposal for a regulation Article 38 – paragraph 2 – introductory part 2. In order to carry out
Amendment 659 #
Proposal for a regulation Article 38 – paragraph 3 – subparagraph 1 – introductory part In order to carry out
Amendment 660 #
Proposal for a regulation Article 38 – paragraph 3 – subparagraph 1 – point d Amendment 661 #
Proposal for a regulation Article 38 – paragraph 3 – subparagraph 2 The
Amendment 662 #
Proposal for a regulation Article 38 – paragraph 5 – subparagraph 1 Where a cooperative within the meaning of Article 2(14) of Directive 2006/43/EC or a similar entity as referred to in Article 45 of Directive 86/635/EEC is required or permitted under national law to be a member of a non-profit-making auditing entity,
Amendment 663 #
Proposal for a regulation Article 38 – paragraph 5 – subparagraph 2 Amendment 664 #
Proposal for a regulation Article 39 Amendment 665 #
Proposal for a regulation 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 (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
Amendment 667 #
Proposal for a regulation 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 implementation of the provisions of Article 33(1), in particular regarding the rotation of tasks;
Amendment 668 #
Proposal for a regulation 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 implementation of the provisions of Article 33(1), in particular regarding the rotation of tasks;
Amendment 669 #
Proposal for a regulation 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 670 #
Proposal for a regulation Article 42 – paragraph 2 – subparagraph 1 By X X 20XX [
Amendment 671 #
Proposal for a regulation Article 43 – paragraph 4 – subparagraph 2 The competent authorities shall
Amendment 672 #
Proposal for a regulation Article 46 – title E
Amendment 673 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 1 The cooperation between competent authorities shall be organised within the framework of E
Amendment 674 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 1 The cooperation between competent authorities shall be organised within the framework of
Amendment 675 #
Proposal for a regulation 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 676 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 2 Amendment 677 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 2 Amendment 678 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 3 E
Amendment 679 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 3 Amendment 680 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 4 Amendment 681 #
Proposal for a regulation Article 46 – paragraph 1 – subparagraph 4 E
Amendment 682 #
Proposal for a regulation Article 46 – paragraph 2 2. E
Amendment 683 #
Proposal for a regulation Article 46 – paragraph 2 2.
Amendment 685 #
Proposal for a regulation Article 46 – paragraph 3 – subparagraph 1 – introductory part In order to facilitate the exercise of the tasks provided for in this Regulation,
Amendment 686 #
Proposal for a regulation Article 46 – paragraph 3 – subparagraph 1 – point e Amendment 687 #
Proposal for a regulation Article 46 – paragraph 3 – subparagraph 2 Amendment 688 #
Proposal for a regulation Article 46 – paragraph 4 Amendment 689 #
Proposal for a regulation Article 46 – paragraph 4 – subparagraph 1 By X X 20XX [four years after the entry into force of the Regulation], and at least at on a two-year basis thereafter,
Amendment 690 #
Proposal for a regulation Article 46 – paragraph 4 – subparagraph 2 Amendment 691 #
Proposal for a regulation Article 46 – paragraph 4 – subparagraph 3 In a report to be prepared by X X 20XX [two years after the entry into force of the Regulation],
Amendment 692 #
Proposal for a regulation Article 46 – paragraph 4 – subparagraph 4 For the purpose of this report,
Amendment 693 #
Proposal for a regulation Article 46 – paragraph 4 – subparagraph 5 In a report to be prepared by
Amendment 694 #
Proposal for a regulation Article 46 – paragraph 4 – subparagraph 6 – introductory part In a report, to be prepared by
Amendment 695 #
Proposal for a regulation Article 46 – paragraph 4 – subparagraph 7 In a report, to be prepared by X X 20XX [twelve years after the entry into force of the Regulation],
Amendment 696 #
Proposal for a regulation Article 46 – paragraph 5 Amendment 697 #
Proposal for a regulation Article 46 – paragraph 5 5. Before X X 20XX [three years after the entry into force of the Regulation] the Commission shall present a report, on the basis of the E
Amendment 700 #
Proposal for a regulation Article 51 – paragraph 2 – subparagraph 3 Amendment 701 #
Proposal for a regulation Article 51 – paragraph 2 – subparagraph 4 The investigation or inspection shall be subject throughout to the overall control of the Member State on whose territory it is conducted. However, in the event of an investigation or inspection with cross- border effect, the competent authorities may request
Amendment 702 #
Proposal for a regulation Article 52 – paragraph 1 Where the audit firms concerned by the requirement in Article 43 belong to networks of at least Union dimension, competent authorities shall cooperate within
Amendment 703 #
Proposal for a regulation Article 52 – paragraph 2 The competent authorities shall make available to
Amendment 704 #
Proposal for a regulation Article 52 – paragraph 3 Amendment 705 #
Proposal for a regulation 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 706 #
Proposal for a regulation Article 53 – paragraph 3 – subparagraph 1 With regard to specific networks, colleges of competent authorities shall be established by
Amendment 707 #
Proposal for a regulation Article 53 – paragraph 7 7. In the absence of agreement concerning the written coordination arrangements under paragraph 6, any member of the college may refer the matter to
Amendment 708 #
Proposal for a regulation 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 709 #
Proposal for a regulation Article 55 – paragraph 1 1. The obligation of professional secrecy shall apply to all persons who work or who have worked for
Amendment 710 #
Proposal for a regulation Article 55 – paragraph 2 2. Paragraph 1 of this Article and Article 37 shall not prevent
Amendment 711 #
Proposal for a regulation Article 55 – paragraph 3 3. All the information exchanged under this Regulation between
Amendment 712 #
Proposal for a regulation Article 56 – paragraph 2 2. Regulation (EC) No 45/2001 shall apply to the processing of personal data carried out by the EGAOB, ESMA, EBA and EIOPA in the context of this Regulation.
Amendment 713 #
Proposal for a regulation Article 57 – paragraph 1 – subparagraph 1 The competent authorities
Amendment 714 #
Proposal for a regulation Article 57 – paragraph 1 – subparagraph 3 Where such exchange of information
Amendment 715 #
Proposal for a regulation Article 57 – paragraph 2 – subparagraph 1 The competent authorities shall cooperate with the competent authorities or other relevant bodies of third countries regarding the quality assurance reviews and investigations of auditors and audit firms.
Amendment 716 #
Proposal for a regulation Article 57 – paragraph 2 – subparagraph 2 Amendment 717 #
Proposal for a regulation Article 58 – paragraph 1 The competent authority of a Member State
Amendment 718 #
Proposal for a regulation Article 59 – paragraph 1 The competent authority of a Member State
Amendment 719 #
Proposal for a regulation Article 60 – paragraph 1 Amendment 721 #
Proposal for a regulation Article 61 – paragraph 2 Amendment 722 #
Proposal for a regulation 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
Amendment 723 #
Proposal for a regulation Article 63 – paragraph 2 Amendment 724 #
Proposal for a regulation Article 64 – paragraph 2 Amendment 725 #
Proposal for a regulation Article 67 – paragraph 1 1. Competent and judicial authorities shall provide
Amendment 726 #
Proposal for a regulation Article 67 – paragraph 2 2. Where the competent authority has disclosed administrative measures, sanctions and fines to the public, it shall simultaneously report that fact to
Amendment 727 #
Proposal for a regulation Article 68 Amendment 728 #
Proposal for a regulation Article 68 – paragraph 2 2. The power to adopt delegated acts referred to in Article
Amendment 729 #
Proposal for a regulation Article 68 – paragraph 3 3. The delegation of powers referred to in
Amendment 730 #
Proposal for a regulation Article 68 – paragraph 5 5. A delegated act adopted pursuant to Article
Amendment 731 #
Proposal for a regulation Article 68 a (new) Article 68 a Organization of EGAOB The EGAOB shall organize its own operational arrangements and adopt its own rules of procedure. The rules of procedure shall amongst others stipulate the election of a chairperson from among its members, funding arrangements by the members and the establishment of working groups. The EGAOB shall publish an annual report. The EGAOB shall take up its duties at the latest on X.X.20XX [three months after the entry into force of the Regulation].
Amendment 732 #
Proposal for a regulation Article 69 – paragraph 1 By X X 20XX [five years after the end of the transitional period] the Commission shall prepare a report on the application of this Regulation. The report shall take due account of the report prepared by
Amendment 733 #
Proposal for a regulation Article 69 a (new) Article 69 a Report on ESMA The Commission shall by X X ( five years after the end of the transitional period) prepare a report on ESMA's current and future role. The Commission shall assess whether ESMA has enough resources to fulfil its tasks according to this Regulation.
Amendment 736 #
Proposal for a regulation Article 70 – paragraph 2 a (new) 2 a. By derogation from Articles 32 and 33 and by derogation from paragraphs 1 and 2, if more than one statutory auditor or audit firm have been appointed after [the date of entry into force of the Regulation], the following requirements shall apply for a period of 6 years: (a) individually allocated tasks to one of the statutory auditor or audit firm shall not initially be less than 20% of the total individually allocated tasks; (b) mandatory rotation of individually allocated tasks as referred to in Article 33(1) shall cover at least 60% of the total of the individually allocated statutory audit work.
Amendment 737 #
Proposal for a regulation Article 70 – paragraph 2 b (new) 2 b. By derogation from paragraph 1 and 2, where more than one statutory auditor or audit firm have been appointed, the tendering procedure as referred to in Article 32(3) shall apply after [the date of entry into force of the Regulation] at least every other renewal.
Amendment 738 #
Proposal for a regulation Article 72 – paragraph 3 However, Article 32(7) shall apply from […] [the date of the entry into force of the Regulation]
Amendment 739 #
Proposal for a regulation Article 72 – paragraph 3 However, Article 32(7) shall apply from […] [the date of the entry into force of the Regulation]
Amendment 741 #
Proposal for a regulation Annex 1 – part I – subpart A – point 5 Amendment 742 #
Proposal for a regulation Annex 1 – part I – subpart A – point 5 Amendment 743 #
Proposal for a regulation Annex 1 – part I – subpart A – point 6 6. The statutory auditor or audit firm infringes Article 10 by providing services other than statutory audit services which are prohibited or related financial audit services to the audited entity.
Amendment 744 #
Proposal for a regulation Annex 1 – part I – subpart E – point 23 Amendment 745 #
Proposal for a regulation Annex 1 – part II – subpart A – point 3 source: PE-500.464
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