The European Commission has produced a Q&A document on the implementation of the new Statutory Audit Framework. The objective of the Q&A is to facilitate the implementation of the new EU regulatory framework on statutory audit composed of: (i) 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 Accounts (the Directive); and (ii) 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 entities and repealing Commission Decision 2005/909/EC (the Regulation). The aim of the Q&A document is to contribute to a consistent application of the new framework across the EU.
The Regulation becomes applicable on, and the Amending Directive must be implemented into domestic law by 17 June 2016. The framework will first apply in respect of financial years starting after that date.
According to the Commission, the Q&A covers practical questions raised by the profession, the industry, investors, academics, and other stakeholders on the implementation of the new EU regulatory framework. Where possible, the Q&A aims to provide preliminary guidance on the questions raised. The process of implementation of the new EU regulatory framework entails close cooperation between the European Commission, national regulators and supervisors. Several aspects remain to be clarified together with the Member States, as they make progress in the preparation of national transposition measures.
The Q&As cover the following topics:
- Entry into force / application;
- Next steps;
- Structure of fees on services other than audit;
- Prohibition of non-audit services;
- Audit report;
- International Standards on Auditing (ISAs);and
- Audit Committee