EU Audit Reform aims to improve audit quality and restore investor confidence. It imposes new requirements on Public Interest Entities (PIEs) directors, stakeholders and their auditors.
As of 17 June 2016 legislative changes will apply to the audit market. For stakeholders of PIEs there are a number of imminent actions that will need to be considered ahead of this date.
The European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and regulation (EU) No. 537/2014) Regulations 2016, SI no. 312 of 2016. These Regulations give effect to (i) Directive 2014/56/EU (“The Directive”) 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 and (ii) certain provisions of Regulation (EU) No 537/2014 (“The EU Regulation”) 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 primary objective of the amendments is to reinforce investor confidence in the truth and fairness of financial statements published by European companies.
The Directive mainly covers:
The EU Regulation contains a series of additional requirements that relate to the statutory audits of PIEs (entities incorporated in an EU Member State whose transferable securities are listed on a regulated market of any Member State of the EU, Credit Institutions, Insurance Undertakings, or entities deemed by Member States to be PIEs), this includes;
An EU regulation is automatically law in a Member State requiring no action from Member State governments to be legally effective.
The primary objective of the EU Regulation is to enhance public confidence in the financial statements of PIEs, and hence contribute to the orderly functioning of markets through greater integrity and efficiency of financial statements.
The changes focus exclusively on PIEs and mainly cover:
As one of only 9 Irish PIE auditors, EisnerAmper Ireland provides the specialist services to help you get compliant:
Both the Directive and the EU Regulation will become applicable on the 17 June 2016.
A copy of the European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and regulation (EU) No. 537/2014) Regulations 2016, SI no. 312 of 2016 is available here: S.I. No. 312 of 2016 (pdf).
Diarmaid is a Partner and is the Firm’s Head of Audit.
Diarmaid provides audit and assurance services to the firm’s domestic and international Financial Services clients, including aircraft leasing, international technology companies, structured finance vehicles and funds. Diarmaid also leads the provision of the Firm’s advisory services to Irish and international retail banks.
Diarmaid works with the Firm’s corporate clients on pension’s compliance, financial reporting, risk management, internal and external audit and regulatory matters.
As Partner on engagements with both the Central Bank of Ireland and the National Asset Management Agency (“NAMA”), Diarmaid has extensive experience undertaking multiple asset, governance, due diligence and business plan reviews.
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