developments in auditing
Post on 14-Jan-2016
213 Views
Preview:
DESCRIPTION
TRANSCRIPT
-
Standing for trust and integrity
Developments in Auditing
19 September 2014, SOEL Conference Andr Kilesse, FEE President
-
Presentation content
About FEE
New Audit Policy
Related FEE Projects
2
-
Standing for trust and integrity
About FEE
-
FEE federates professional institutes across Europe
4
47 professional institutes of accountants and auditors 36 European countries, including all EU 28 800,000 professionals including all sections of the
profession: large, medium, small practices, business, public sector
-
FEE adds value to Members 5
Representation toward stakeholders
Analysing and
influencing public policy developments
Promoting
cooperation among Members
Informs, advises & influences EU & international regulation, public policy, standard setting etc.
EC, EP, Council, ESMA, EBA, EIOPA, IOSCO - IASB, EFRAG, IIRC, IFAC, IAASB, IESBA, IPSASB, CAGs, PCAOB, OECD etc.
Facilitates consensus between Institutes, accountancy firms (big & small)
-
Standing for trust and integrity
New Audit Policy
-
New legislative texts
Directive 2014/56/EU amending the Directive 2006/43/EC3 (2006 SAD) on every statutory audit in the EU
Regulation (EU) No 537/20144 containing requirements that relate specifically to statutory audits of Public Interest Entities (PIEs)
7
-
Who will be affected? 8
Directive: horizontal measures, applicable to all statutory audits within the EU
Regulation: stricter requirements for the audits of Public Interest Entities (PIEs) that include: Credit institutions Listed companies Insurance undertakings Other entities designated as such by Member
States
-
When will this take effect? 9
17 June 2016 Directive need to be transposed into
national laws Most of the provisions in the
regulation take effect
16 June 2014
Entry into force Transitional arrangements start to take effect
27 May 2014
Publication in the Official Journal of the EU
-
Main provisions of the Directive
More specific provisions in the areas of Independence and objectivity Quality assurance, investigation and
sanctions (see below) Internal organisation of the auditor and audit
work ISA adoption: EC development process Functioning of audit committees of PIEs
10
-
Directive - Quality assurance and supervision (1)
Competent Authority (CA) has ultimate responsibility for the oversight of: Approval and registration of auditors Adoption of relevant standards Continuing education, quality assurance
system, investigative and administrative disciplinary systems
11
-
Directive - Quality assurance and supervision (2)
Quality assurance reviews, investigations and disciplinary matters can no longer be delegated to professional bodies for PIE audits
Quality assurance reviews: Frequency follows from risk-based
approach and if PIE/non PIE To be appropriate and proportionate to the
scale & complexity of the audited entity
12
-
Regulation: Main provisions
Auditor communication (see below) Non-audit services (NAS) (see below) Mandatory audit firm rotation (MAFR) (see
below) Cooperation of audit oversight bodies and
Creation of Committee of European Auditing Oversight Bodies (CEAOB)
13
-
Regulation: Auditor Communication
More extensive public reporting: For all entities, disclosure of a statement
on any material uncertainty that may cast doubt about the entitys ability to continue its activities as a going concern
For PIEs only, reporting on the most significant risks of material misstatements
Additional report to the Audit Committee
14
-
Regulation: Prohibition of non-audit services (NAS)
List of prohibited NAS during the period audited until issuance of audit report includes:
A number of tax services Valuation services Services involving playing any part in the management or
decision making of the audited entity Services linked to the financing, capital structure etc.
But MS may establish stricter rules and/or may opt to allow valuation services and certain tax services, if no direct or immaterial effect on the audited financial statements
15
Even the period before for specific
services
-
Regulation: Limitation of permitted (NAS)
16
NAS outside of the list Provision subject to Audit Committee approval, and Are capped at 70% of the average audit fees charged by
audit firm over the preceding three consecutive years
Average 80 70 % = 56
-
Regulation: Mandatory audit firm rotation (MAFR)
17
Maximum duration of audit engagement < 10 years, but MS may set a shorter duration
Unless MS decides to extend rotation period to: Max. 20 years in case of tendering, or Max. 24 years in case of joint audit
Cooling-off period of 4 years Transitional arrangements apply
Audit firm appointment for PIE: at least one-year term
In some EU Member States, already set
differently
-
Standing for trust and integrity
FEE related projects
-
Online FAQ
19
Options Tables
-
Factsheets
Briefing Papers
20
-
Stay connected!
@FEE_Brussels @FEE_SMP
Follow: Federation of European Accountants Join: Connect with European Professional Accountants
FEE newsletter Subscribe at www.fee.be
Visit us @ www.fee.be
Developments in AuditingPresentation contentAbout FEEFEE federates professional institutes across EuropeFEE adds value to MembersNew Audit PolicyNew legislative textsWho will be affected?When will this take effect?Main provisions of the DirectiveDirective - Quality assurance and supervision (1)Directive - Quality assurance and supervision (2)Regulation: Main provisionsRegulation: Auditor CommunicationRegulation: Prohibition of non-audit services (NAS)Regulation: Limitation of permitted (NAS)Regulation: Mandatory auditfirm rotation (MAFR)FEE related projectsOnline FAQBriefing PapersStay connected!
top related