Report on monitoring developments in the EU market for providing statutory audit services to public-interest entities

The reform of EU audit legislation came into being to boost confidence in the integrity of financial statements. The legislation consists of an audit Directive and an audit Regulation. The Directive applies to all statutory audits; the Regulation contains specific requirements for the statutory audits of public-interest entities (PIEs).

The Regulation aims both at enhancing audit quality and at promoting competition in the audit market. Article 27 serves as a means of effectively and regularly monitoring compliance with these aims. Article 27 deals with the monitoring of the following aspects of the EU market for the provision of statutory audit services to PIEs: (a) market concentration levels; (b) risks to audit quality and measures to mitigate them; and (c) the performance of audit committees.

Under the Regulation each national authority responsible for audit oversight (NCA) and the European Competition Network (ECN) must draw up a report on developments in their market for the provision of statutory audit services to PIEs. The Commission then uses these reports to draw up a joint report covering the whole EU. This report is the first such joint report and will serve as a baseline for future reports.

• Primary Source

ESO: Background information: New EU rules to promote high-quality audits take effect http://www.europeansources.info/record/press-release-new-eu-rules-to-promote-high-quality-audits-take-effect/

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