Treatment of fees for sustainability reporting services
This release is addressed to all réviseurs d’entreprises agréés (approved statutory auditors) and cabinets de révision agréés (approved audit firms) registered with the CSSF to carry out statutory audits. It is also addressed to the audit committees of public-interest entities, which are responsible for examining and monitoring the independence of réviseurs d’entreprises agréés.
In accordance with Article 4(2) of Regulation (EU) No 537/2014 on specific requirements regarding statutory audit of public-interest entities, when a statutory auditor or audit firm provides, for a period of three or more consecutive financial years, non-audit services to an audited public-interest entity, its parent undertaking or its controlled undertakings, the total fees for such services shall be limited to no more than of 70% of the average of the fees paid in the last three consecutive financial years for the statutory audit(s) of the audited entity and, where applicable, of its parent company, of its controlled undertakings and of the consolidated financial statements of this group of undertakings. (“Fee Cap”).
The objective of the CSSF is to have a harmonized and consistent approach to the fees charged by réviseurs d’entreprises agréés and cabinets de révision agréés in accordance with the provisions of Directive (EU) 2022/2464 of December 14, 2022 (“CSRD”) for the purposes of calculating the “Fee Cap”, as long as no national provisions have been adopted to implement CSRD in Luxembourg.
Article 4 of CSRD is directly applicable as an amendment to Regulation (EU) No 537/2014 and requires no further transposition. It applies from 1 January 2024, to financial years starting on or after 1 January 2024. Point 1) of this CSRD Article 4 has amended the article relating to the “Fee Cap” in order to exclude, for the purposes of the limits specified, the assurance of sustainability information.
The premise is therefore that the assurance engagement and assurance report on sustainability reporting in accordance with Articles 19a, 29a and 29d of CSRD for public-interest entities are not non-audit services within the meaning of Article 4(2) of Regulation (EU) 537/2014 and will therefore not be subject to the Fee Cap calculation, even though CSRD has not yet been transposed into national law.
On the other hand, consultancy, assistance or assurance services other than those referred to in the previous paragraph for sustainability reporting, which are permissible in compliance with the independence rules, are considered to be non-audit services within the meaning of Article 4(2) of Regulation (EU) 537/2014 and are not excluded from the calculation of the Fee Cap.