While the UK government and the UK accounting regulator carefully ponder before implementing the EU audit reform through an ongoing consultation, the Spanish cabinet gave the green light to its own audit reform plans amid the widespread concerns of the Spanish accountancy profession.
Earlier this month the Spanish cabinet approved a definitive draft of an audit law which implements the EU reform. The draft will be sent for discussion to the Congress of Deputies, Spain’s lower chamber of parliament, which represents the last chance for introducing amendments in the text.
However Spain’s ruling party, Partido Popular, has the majority of seats in the Congress of Deputies with 184 out of 350 Spanish MPs, and therefore the text is unlikely to be changed.
Spain’s two professional accountancy bodies have expressed deep concerns over the way the Ministry of Finance rushed the EU audit reform and curtailed the participation of stakeholders to inform the debate from the early stages of the draft.
Both the Institute of Auditors (ICJCE) and the Corporation of Auditors of the Council General of Economists (REA+REGA), have made it clear that they feel excluded from the whole process.
Recently REA+REGA president Carlos Puig de Travy said that the last known version of the draft law requires key amendments to align the text to the EU market and to tackle a number of technical issues detected.
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Among those issues is the definition of public interest entity (PIE). According to REA+REGA the draft makes more than 6,000 companies fall in the category of PIE, eleven times more than in Germany and four times more than in the UK.
The ICJCE will hold a press conference tomorrow where president Mario Ayala will comment on the draft law.
According to the Federation of European Accountants, the EU audit reform, which comprises a directive and a regulation, left a wide range of options for member states to decide on: 51 and 32, respectively. The EU legislation pack was passed in June 2014 and comes into force in June 2016.
ICJCE = Instituto de Censores Jurados de Cuentas de España
REA+REGA = Corporación de Auditores del Consejo General de Economistas