Day 6 July 2016 There was a draft Act on statutory auditors and their local government, audit firms and public oversight (hereinafter the bill).
The aim is to make the auditors independent as auditors in the field of public interest units (National Credit Union Cash, large National Credit Unions, large national payment institutions, large electronic money institutions, open pension funds, general pension societies, open investment funds, specialised investment funds open, public investment funds closed, large investment fund companies and large brokerage entities).
Restrictions on the provision of services by auditors by auditors appear in the draft law. It should come into force. 17 June 2016, because this was the time to implement into Polish law changes to the directive and the EU regulation, changing the market for audit of public interest entities.
The bill is to implement Directive 2006/43 of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Directive 78/660 on the annual accounts of certain types of companies and 83/349/EWG on consolidated accounts of banks and other financial institutions and repealing Directive 84/253 on the approval of persons responsible for carrying out statutory audits of accounting documents (Official Journal of the European Union L, No.
157/87 to 9 June 2006, and Directive 2014/56 amending Directive 2006/43 on statutory audits of annual accounts and consolidated accounts (Official Journal of the European Union L, No. 158 to 27 May 2014, p.
196) and for use Regulation (EU) 537/2014 on specific requirements for statutory audits of public-interest entities (Official Journal of the European Union L, No. 158 to 27 May 2014, p.77 with correction in Official Journal of the European Union L, No. 170 to 11 June 2014, p. 66).
The audit firm shall be liable for damage caused by its act or omission.
The draft law sets out, first and foremost, the powers and pursuit of the profession of statutory auditor; the organisations of the professional self-government of statutory auditors; the activities of audit firms, including their internal organisation and the organisation of work, as well as their responsibility for infringements of law; the exercise of public oversight of statutory auditors and audit firms, the professional self-government of statutory auditors and bodies of public interest; the performance of financial audit activities in public interest units; the creation and operation of audit committees in public interest units; the disciplinary responsibility of statutory auditors; the cooperation of a public oversight authority with other public oversight bodies of the European Union and of States third and the European Supervisory Authorities.
The bill assumes that the statutory auditor's profession consists in the provision of: financial audit activities; non-reserved certification services and related services. The statutory auditor is to perform the profession on behalf of the audit firm.
According to the draft law, the audit company will be able to be only an entity in which audit of financial statements is carried out by auditors, entered on the list of audit firms and operating in one of the following forms:
- an auditor conducting an economic activity on his own behalf and on his own account;
- a civil partnership, public partnership or partnership in which the majority of the votes are held by statutory auditors or audit firms approved at least in one State of the European Union; in the companies in which the Management Board was established, most of the members of the Management Board shall be auditors approved at least in one State of the European Union; if the Management Board consists of no more than 2 persons, at least one they are an auditor;
- a limited partnership in which only statutory auditors or audit firms are complementary, approved at least in one State of the European Union (Article 42 Draft Act);
- a capital company or cooperative that meets the following requirements:
- the majority of the members of the Management Board shall be statutory auditors approved at least in one State of the European Union; if the Management Board consists of no more than 2 persons, one of which is the statutory auditor,
- the majority of votes at the general meeting shall be held by statutory auditors or audit firms approved at least in one State of the European Union,
- the majority of the members of the supervisory authorities are auditors approved at least in one State of the European Union;
- a cooperative review union that meets the following requirements:
- hires auditors to audit,
- the majority of the members of the Management Board shall be statutory auditors approved at least in one State of the European Union; if the Management Board consists of no more than 2 persons, one of them is a statutory auditor.
The main subject of the audit firm's activities under the draft law will be the execution of financial audit activities. The subject matter of the audit firm's activities may also include: service accounting and tax management; tax advisory; bankruptcy or winding-up proceedings; publishing or training activities in the field of accounting, auditing and taxation; the performance of economic and financial expertise or opinions; the provision of advisory or management services requiring knowledge of accounting, auditing, tax law, organisation and operation of undertakings; the provision of certification services, not reserved for statutory auditors; the provision of related services and the provision of other services reserved in separate provisions for the performance of statutory auditors.
The audit firm shall be liable for damage caused by its act or omission. The amount of compensation for liability of audit firms investigating: public interest entities - must not exceed a smaller amount from two: 20-twice the remuneration laid down in the contract of execution of the financial audit activity or amount 12,000,000 PLN; other units - may not exceed a smaller amount from two: 10-twice the remuneration laid down in the contract of execution of the financial audit activity or amount 3,000,000 PLN Article 48 Draft Act)
The statutory auditor in accordance with the draft law shall be responsible for examining the consolidated financial statements in case of misdrafting. In addition, the group auditor shall be responsible for drawing up the audit report on the consolidated financial statements and, where the audited parent undertaking has an audit committee or other body performing its functions, also for drawing up an additional report to the audit committee on the audit of the consolidated financial statements.
The statutory auditor shall be liable for disciplinary action if he has committed disciplinary misconduct. A disciplinary offence shall consist of a breach by the statutory auditor of: the legal provisions relating to the pursuit of the profession, the principles of professional ethics, independence or national standards for the pursuit of the profession; the legal provisions relating to the performance of duties relating to the affiliation of the statutory auditor to the professional self-government; the legal provisions relating to the conduct of the business in the form of an audit firm and the legal provisions relating to the performance of functions in the governing or supervisory bodies of audit firms.
The establishment of new regulations aims to transpose into national legal order the provisions of the new European Union law on audit. It will also allow the precise identification of the statutory auditor's tasks as an auditor in the field of public interest entities.