2 May 2016
New European regulation in the Auditing sector: amendments
The main amendments included in the new rules in Directive (2006/43/EC) that will come into force on 17 June 2016 refers to:
a.Certain definitions (set forth under art. 2), including the definition of Public Interest Entities (PIEs).
b.Aspects related to the independence and objectivity of the auditor, and the global organization of the work and the actual auditor
c.Aspects related to quality control
d.Public report of the auditor (under adaptation in the New International Auditing Standards) and the obligation to issue reports addressed to PIE auditing committees, regulated in detail and including requirements for the disclosure of certain information. A key aspect for reinforcing the quality and independence of the work of the auditor.
e.Establishing of restrictions to the provision of certain services other than auditing to PIE audit clients, in particular the introduction of a list of prohibited services. For non-PIEs, a system is maintained for analysing threats and safeguarding independence.
f.Establishing requirements relating to the obligatory rotation of auditing firms for PIEs
g.The supervising of auditors and firms within an EU scope and the establishing of a new authority, the Committee of European Auditing Oversight Bodies (CEAOB).
This new legislative reform, as well as the adaptation of the same by the various Member States of the EU, are relevant aspects with a significant impact on the auditing profession and should help to increase transparency, creating greater trust among the different interest groups, economic agents and of course the Company.
José Manuel Teruel
Technical Director and Quality Control manager at Auren