Organisation of the Public Oversight of the Audit Profession in Europe State of affairs after the implementation of the 2014 Audit Reform Survey AUDIT & ASSURANCE March 2018 HIGHLIGHTS Enhancing companies’ credibility through audit ensures that stakeholders make informed decisions based on these companies’ financial statements. In parallel, public oversight ensures audit quality. The revised EU statutory audit rules significantly impact how the public oversight of statutory auditors and audit firms is organised. Designated public oversight bodies have the ultimate responsibility for the oversight of the audit profession. They can delegate certain tasks to other authorities and professional bodies. This survey presents the impact of the new rules. Our findings show that the national public oversight bodies now carry out many activities previously in the competence of the professional bodies. This survey also provides an overview of how the public oversight is organised in each of the 28 EU Member States, Iceland and Norway, i.e. composition, funding, transparency and key activities of the national public oversight bodies and delegation of tasks to other bodies. This publication is based on the input of our members and it is part of a series of work done by Accountancy Europe on the new rules on statutory audit. It follows up on our 2015 survey Organisation of the Public Oversight of the Audit Profession in 23 European Countries. 1 Table of Contents Glossary and list of abbreviations ............................................................................................................ 3 Background .............................................................................................................................................. 4 Findings .................................................................................................................................................... 7 Austria .................................................................................................................................................... 10 Belgium .................................................................................................................................................. 13 Bulgaria .................................................................................................................................................. 15 Croatia.................................................................................................................................................... 17 Cyprus .................................................................................................................................................... 19 Czech Republic ...................................................................................................................................... 21 Denmark ................................................................................................................................................. 24 Estonia ................................................................................................................................................... 26 Finland ................................................................................................................................................... 28 France .................................................................................................................................................... 30 Germany ................................................................................................................................................. 32 Greece .................................................................................................................................................... 36 Hungary .................................................................................................................................................. 40 Iceland.................................................................................................................................................... 43 Ireland .................................................................................................................................................... 45 Italy ........................................................................................................................................................ 48 Latvia...................................................................................................................................................... 51 Lithuania ................................................................................................................................................. 53 Luxembourg ........................................................................................................................................... 56 Malta ...................................................................................................................................................... 60 The Netherlands ..................................................................................................................................... 62 Norway ................................................................................................................................................... 64 Poland .................................................................................................................................................... 66 Portugal .................................................................................................................................................. 68 Romania ................................................................................................................................................. 70 Slovakia .................................................................................................................................................. 73 Slovenia .................................................................................................................................................. 75 2 Spain ...................................................................................................................................................... 78 Sweden .................................................................................................................................................. 81 UK .......................................................................................................................................................... 83 3 Glossary and list of abbreviations 2014 EU Audit Directive - Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts1 2014 EU Audit Regulation - Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities2 Audit Reform - umbrella term used for the above 2014 EU Audit Directive and Regulation CPA – Certified Public Accountant CPD – Continuing Professional Development CEAOB - Committee of European Auditing Oversight Bodies EC – European Commission EEA – European Economic Area, i.e. the European Union, Iceland, Liechtenstein and Norway EU - European Union IESBA - International Ethics Standards Board for Accountants ISAs – International Standards on Auditing PIE - Public Interest Entity 1 Available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0056 2 Available at http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32014R0537 4 Background Objective Since 17 June 2016, new rules on statutory audit (Audit Reform), have been applicable across the EU3. They have a significant impact on the organisation of the public oversight of statutory auditors and audit firms. This survey has been carried out by Accountancy Europe to understand the impact of these new rules on the organisation of the public oversight of the audit profession as compared to the situation before the Audit Reform. It follows up on our 2015 survey Organisation of the Public Oversight of the Audit Profession in 23 European Countries.4 Based on the input of Accountancy Europe’s members, the survey provides an overview of how the public oversight is now organised in each of the 28 EU Member States, Iceland and Norway. Iceland and Norway transposing the Audit Reform with a time lag, the information reported on these countries is subject to change and will be updated in future. Information presented in the survey The survey provides, per country, the following information: • Name of the national public oversight body and other relevant bodies • Composition of the national public oversight body, its funding and transparency of its work • Key activities of the public oversight body and delegated tasks Key activities of public oversight bodies and delegation Designated public oversight bodies have the ultimate responsibility for these activities: • The approval and registration of auditors and audit firms • The adoption of standards (professional ethics, internal quality control of audit firms and auditing), except for the adoption of standards, where those standards are adopted or approved by other Member State authorities • The continuing education of auditors • The quality assurance • The investigative and administrative disciplinary systems Member