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LEGISLATION |
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New EU Directive on statutory audits See CLM: ¶4290 |
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Statutory reference: EC Directive 2006/43 |
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A new EU directive updating and introducing additional rules on the audit of company accounts was published on 9 June 2006 (Official Journal L157/87). EU member states will have until 29 June 2008 to transpose it into national law. The directive’s main provisions are as follows: 1. “Statutory auditor” and “audit firm” are separately defined, and many of the new provisions deal specifically with audit firms. 2. Each statutory auditor and audit firm will have to be identified in an electronic public register. For audit firms, the register will show the number of statutory auditors employed by or associated with it, the owners and management of the firm, and information on any network of which it is a member. 3. A statutory auditor or audit firm will have to be independent from the audited entity, and appointment procedures must ensure that this is the case. 4. Statutory audits will have to be carried out in accordance with international standards on auditing. 5. Statutory auditors and audit firms will have to be subject to a system of quality assurance that is subject to public supervision. Member states will have to organise systems of investigation and sanctions, which will have to provide for appropriate public disclosures. 6. Member states will have to designate supervisory authorities responsible for approval, registration, quality assurance, inspection and discipline. 7. It will only be possible to dismiss the statutory auditor or audit firm if there is a significant reason why the statutory auditor cannot finalise the audit. The reasons for dismissal or resignation will have to be disclosed to the responsible supervisory authorities. |
