Audit Policy

May 2022

  • New publication and upcoming webinar on audit quality indicators
  • Discussion paper on sustainability assurance under the CSRD
  • Trilogue agreement on DORA reached
  • Provision of non-audit services by statutory auditors continues to drop in Europe

New publication and upcoming webinar on audit quality indicators

Improving audit quality is a shared goal of all parties in the corporate reporting ecosystem. However, there is no generally accepted definition of audit quality.

Different organisations have been active in setting audit quality indicators (AQIs). Accountancy Europe has done a stock-take of recent AQI initiatives in Europe and beyond in its newly published factsheet.

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To hear more insights and the experiences in establishing AQIs in various jurisdictions, register for our webinar on 18 May 2022, at 16:00-18:00.

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Sustainability assurance under the CSRD

The European Commission’s (EC) Corporate Sustainability Reporting Directive (CSRD) proposal introduces an EU-wide requirement for limited assurance on sustainability information with the end goal to move to reasonable assurance in the longer term.

Professional accountants have been providing assurance services on sustainability information to companies in the EU for over two decades. They have built up expertise in this area supported by the professional framework and standards they follow.

Our discussion paper provides insights from practice on key matters related to this new assurance requirement and poses questions to stakeholders, including policy makers and standard setters, to reach a common understanding on the practical implications. Debating these matters early will ensure high quality and consistent application of assurance services across the EU.

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Trilogue agreement on DORA reached

Council and the European Parliament (EP) reached a trilogue agreement on 10 May on the Digital Operational Resilience Act (DORA).

The agreement, which will still need to be confirmed both by EP Plenary and the Council of Ministers, excludes audit firms from its scope. However, within three years an “independent review” will be conducted assessing whether or not audit firms should be included at that stage.

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Provision of non-audit services by statutory auditors continues to drop in Europe

To answer questions about the cost of audit and how it compares to the fees companies pay for other professional services provided by statutory auditors, the International Federation of Accountants (IFAC) published Audit Fees Survey 2022: Understanding Audit and Non-Audit Service Fees, 2013-2020.

The study is based on information on companies trading on US, Canadian and European stock exchanges from 2013 to 2020.

It has confirmed that the provision of non-audit services by statutory auditors continues to drop in European countries. This trend had been reported in the study by Audit Analytics (2020), stating that the % of non-audit fees received from public interest entity (PIE) audit clients has been declining since new measures at EU level were adopted in 2014.

Both the IFAC and Audit Analytics reports are based on publicly available market data collected in the Audit Analytics database.

International Ethics Board calls for stakeholder input on its strategy and work plan

The International Ethics Standards Board for Accountants (IESBA) released a public survey seeking input for developing its Strategy and Work Plan 2024-2027.

The survey seeks input on what key trends, developments or issues the IESBA should consider when developing its strategy.

The deadline for submitting responses is 8 July 2022.

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UK’s FRC announces plan to register auditors of public interest entities

The Financial Reporting Council (FRC) has launched a consultation to take responsibility for the registration of auditors of PIEs from the recognised supervisory bodies (RSBs).

The aim of the proposal is to bolster the FRC’s supervisory toolkit and enable it to become increasingly assertive in holding audit firms to account for the delivery of high-quality audits.

The consultation is open until 26 May 2022.

Read moreThis curated content was brought to you by Júlia Bodnárová, Accountancy Europe Senior Advisor since 2017. You can send her tips by email and connect with her on LinkedIn.