EU Audit legislation, adopted in 2014 introduces more detailed requirements regarding the statutory audit of ‘Public Interest Entities’ (PIEs). The aim of the legislation is to reinforce the quality of the audit and independence of the statutory auditor or audit firm and to restore investor confidence in financial information. This will be achieved in part by fostering more open competition within the audit market and by ensuring that audit committees take their responsibilities in the selection of an audit firm very seriously.
Given that the functions assigned to the audit committee have been extended in various ways, the European Confederation of Directors’ Associations (ecoDa) in cooperation with PwC has decided to help audit committee members understand the main changes by providing a description of aspects of the new legislation affecting audit committees, in comparison with the 2006 Directive. Many companies have yet to assess the full implications of this reform and are still in the process of getting ready to adapt to these changes although the legislation will be applicable from 17 June 2016.
This guidance was produced by a working group set up by ecoDa and PwC.