An overview of the implementation of the European Union audit reform, which came into force last June, shows consistency among member states in implementing the core rules, yet the options offered in the reform have led to a patchwork of different rules across Europe.
Accountancy Europe released the overview of the implementation of EU audit rules nine months after the deadline. The March State of Play has revealed the updates on the process in 31 European countries (including 28 EU member states).
The report also includes the potential outcomes of providing non-audit services, mandatory audit firm rotation, and organising public oversight following the decisions being made by member states.
Regarding mandatory audit firm rotation there was consistency in having the engagement period set at 10 years however there were deviations on the option to allow extensions. There were 4 different engagement periods across 18 member states for audit tendering.
For non-audit services (NAS) the majority of member states opted for derogation of prohibition of certain tax and valuation services. This was under the conditions that the impact on audited financial statements is little or none, that the evaluation of the impact on financial statements is documented in the additional report to the audit committee and that the principles of independence are applied by the statutory auditor. Only two member states opted to lower the NAS cap below 70%; Poland and Portugal.
The EU Audit Legislation implementation website can be found here showing how each country has implemented the audit rules.