16 April 2015

FEE: European countries increasingly move towards ISAs

FEE's new publication, "Overview of the ISA adoption in the EU", demonstrates to what extent the 28 European Union Member States have chosen to apply ISAs for all audits. Based on information gathered from FEE Member Bodies, significantly more countries voluntarily adopted ISAs than in 2013.

The publication aims to provide an overview of the current adoption status of ISAs in the EU. The following information is included:

• Adoption status in each EU Member State;
• Add-onsor carve-outsto clarified ISAs currently in place in EU Member States;
• Adoption status in each EU Member State regarding ISQC 1;
• Guidance on proportionate application of clarified ISAs; and
• How the application of ISAs (and ISQC 1) is made binding as well as disciplinary actionsor sanctionsfor incorrect or incomplete application of ISAs (and ISQC 1) in EU Member States.

Based on the Directive 2014/56/EU amending Directive 2006/43/EC on statutory audits (2006 SAD) and the Regulation (EU) No 537/2014, “EU Member States shall require statutory auditors and audit firms to carry out statutory audits in compliance with international auditing standards adopted by the Commission”. EU law also empowers the EC to adopt ISAs at a European level, but a timetable for this has not yet been set. In the meantime, the SAD provides that Member States may apply national auditing standards.

Notwithstanding that many EU Member States have voluntarily already adopted the ISAs at a national level, either without modification or with a few national additions, formal adoption by the EC is still desirable for a number of reasons, such as:

• Some EU Member States, including large ones, have not yet adopted ISAs voluntarily and are said to wait for EC adoption (France, Germany and Portugal);
• Without an EU adoption mechanism, new and revised ISAs may be adopted at different times or certain standards may not be adopted at all in some jurisdictions, ultimately resulting in an increased lack of harmonisation throughout the EU; and
• EU-wide coordination and collaboration would enable the establishment of more effective mechanisms to guarantee the quality and acceptability of ISA translations. 

Press release

FEE-survey

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