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| European Union - 8th Company Law Directive DIRECTIVE 2006/43/EC DIRECTIVE 2006/43/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 44(2)(g) thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Economic and Social Committee (1), Acting in accordance with the procedure laid down in Article 251 of the Treaty (2), Whereas: (1) Currently, the Fourth Council Directive 78/660/EEC of 25 July 1978 on the annual accounts of certain types of companies (3), the Seventh Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts (4), Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (5) and Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings (6) require that the annual accounts or consolidated accounts be audited by one or more persons entitled to carry out such audits. (2) The conditions for the approval of persons responsible for carrying out the statutory audit were laid down in the Eighth Council Directive 84/253/EEC of 10 April 1984 on the approval of persons responsible for carrying out the statutory audits of accounting documents (7). (1) OJ C 157, 28.6.2005, p. 115. (2) Opinion of the European Parliament of 28 September 2005 (not yet published in the Official Journal) and Council Decision of 25 April 2006. (3) OJ L 222, 14.8.1978, p. 11. Directive as last amended by Directive 2003/51/EC of the European Parliament and of the Council (OJ L 178, 17.7.2003, p. 16). (4) OJ L 193, 18.7.1983, p. 1. Directive as last amended by Directive 2003/51/EC. (5) OJ L 372, 31.12.1986, p. 1. Directive as last amended by Directive 2003/51/EC. (6) OJ L 374, 31.12.1991, p. 7. Directive as amended by Directive 2003/51/EC. (7) OJ L 126, 12.5.1984, p. 20. (3) The lack of a harmonised approach to statutory auditing in the Community was the reason why the Commission proposed, in its 1998 Communication on the statutory audit in the European Union: the way forward (8), the creation of a Committee on Auditing which could develop further action in close cooperation with the accounting profession and Member States. (4) On the basis of the work of that Committee, on 15 November 2000 the Commission issued a Recommendation on quality assurance for the statutory audit in the European Union: minimum requirements (9) and on 16 May 2002 a Recommendation on Statutory Auditors' Independence in the EU: A Set of Fundamental Principles (10). (5) This Directive aims at high-level — though not full — harmonisation of statutory audit requirements. A Member State requiring statutory audit may impose more stringent requirements, unless otherwise provided for by this Directive. (6) Audit qualifications obtained by statutory auditors on the basis of this Directive should be considered equivalent. It should therefore no longer be possible for Member States to insist that a majority of the voting rights in an audit firm must be held by locally approved auditors or that a majority of the members of the administrative or management body of an audit firm must be locally approved. (7) The statutory audit requires adequate knowledge of matters such as company law, fiscal law and social law. Such knowledge should be tested before a statutory auditor from another Member State can be approved. (8) In order to protect third parties, all approved auditors and audit firms should be entered in a register which is accessible to the public and which contains basic information concerning statutory auditors and audit firms. (8) OJ C 143, 8.5.1998, p. 12. (9) OJ L 91, 31.3.2001, p. 91. (10) OJ L 191, 19.7.2002, p. 22. (9) Statutory auditors should adhere to the highest ethical standards. They should therefore be subject to professional ethics, covering at least their public-interest function, their integrity and objectivity and their professional competence and due care. The public-interest function of statutory auditors means that a broader community of people and institutions rely on the quality of a statutory auditor's work. Good audit quality contributes to the orderly functioning of markets by enhancing the integrity and efficiency of financial statements. The Commission may adopt implementing measures on professional ethics as minimum standards. When doing so, it might consider the principles contained in the International Federation of Accountants (IFAC) Code of Ethics. |
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