Businesses and statutory auditors will face changes in the selection of the audit firm for the audit of financial statements. The company will have to develop a special selection procedure to prove that it provides the basis for a good decision. The National Chamber of Auditors encourages the use of the Polish version of the European Accounting Federation document entitled "Election of an auditor. Towards good practice".
A document from the Federation of European Accountants (FEE) from 2013, the purpose of which is to present how to effectively perform the selection of the statutory auditor - you can download it at the end of the article
Rules on the selection of the auditor will change
It appears from the experience of the auditors that most of the audited companies still elect an auditor in the wrong way. Often the only criterion used is price. However, this criterion does not guarantee the quality of the test. – The auditor must have certain resources and experience.
He should be selected according to the entity, the sector in which he operates, its complexity, or the expectations of investors," explains Krzysztof Burnos, President of the National Board of Expert Auditors. Because a properly conducted audit selection process is crucial to ensuring high quality audit and auditor independence.
The problem was seen by the EU legislator. In line with the planned reform of the audit market and with the EU Regulation (EU) 537/2014 on the detailed requirements for statutory audit of public interest entities, the company will have to develop a special audit procedure. It will describe all the elements of the selection.
So that the controlling entity can understand whether the procedure provides the basis for a good decision. The absence of this procedure will entail an administrative penalty.
Good practice is worth it
A document from the Federation of European Accountants (FEE) from 2013, the purpose of which is to provide ways to effectively carry out the selection of the auditor.
The "Audiotor selection – Towards best practices" document, which thanks to the National Chamber of Expert Auditors is now also available in the Polish translation, aims to disseminate good practices allowing the application of the highest standards when selecting an audit firm.
The FEE is addressed to all entities seeking guidance on the selection of the statutory auditor in the most efficient and cost-effective way possible. It is also a useful source of information for stakeholders, e.g. shareholders and investors who assess the entity's statutory auditor selection model.
The report was divided into parts corresponding to the stages of the selection process of the statutory auditor and audit firm: collecting pre-choice information, pre-selection of statutory auditors and audit firms who will be invited to participate in the selection process, developing criteria for the selection of the statutory auditor and audit firm and determining the validity of pre-established criteria, which will facilitate verification, analysis and evaluation of tenders.
Source: www.kibr.org.pl