• Register
Return to: Home > News > Regulation > FEE calls for clarifications in EU audit reform directive and regulation

FEE calls for clarifications in EU audit reform directive and regulation

The Federation of European Accountants (FEE) has called for clarifications on a number of items regarding the implementation phase of the audit reform package, recently agreed upon by the European Union (EU) co-legislators.

In a letter submitted to European Commissioner Michel Barnier, the FEE said there is a need to show how the 70% cap on fees earned for non-audit services rendered to audit clients (in article 9) will be calculated, as according to FEE it is currently open to interpretation.

The FEE also stated that article 10 of the regulation on the prohibition of the provision of non-audit services needs to define parts of its terminology, such as "any part in management or decision making', as practitioners need to know exactly the definition and scope of prohibited non-audit services.

It also noted that some parts of the regulation, such as those about mandatory audit rotation, will have cross border impacts that need to be explained, and that clarification is needed over the adoption of International Standards of Auditing (ISA).

Finally the FEE called for clarification on the timings of the reform. For example it asked what the various transitional periods on mandatory audit rotation would be and the timing of the phased application of certain provisions.

Overall the FEE said it was pleased with the compromises reached on audit reform, but warned the answers to the clarifications given "may significantly impact the application of the new requirements in practise."

The EU audit reform appears to be reaching its final stages, after a qualified majority of the Committee of Permanent Representatives (COREPER) voted it through recently.

According to the COREPER, the approved package allowed reaching a first reading agreement, after the formal voting in the European Parliament (EP) and later in the EU Council.

The vote in the plenary session of the EP could take place in April, after which the EU Council can approve the audit reform package without any further debate.

Any of the EU Council formations, not only the Competiveness one, can approve it. Both the plenary vote in the EP and the approval in the EU Council will put an end to the EU legislative process.

Related article

Profession braces for 10-year audit rotation

Related link

The Federation of European Accountants

Top Content

    Choosing the right location can have cast-iron benefits

    As Game of Thrones, one of the biggest television shows of all time, comes to an end, Joe Pickard looks at how tax incentives offered to television and film production companies help the wider economy.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.