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Pursuant to the Audit Law, public-interest entities are:
The EU Audit Regulation now centralises all requirements applicable to statutory audit of public-interest entities, in particular concerning:
The optional provisions provided for in the EU Audit Regulation are included in the Audit Law (Articles 49 to 51). Thus, derogations have been introduced regarding audit fees (cap of 70%) for a maximum period of 2 years at the justified request of the approved audit firm, regarding the provision of certain tax and evaluation services under certain conditions and regarding the maximum duration of the audit engagement, which may be extended to 20 years when a public tender procedure is conducted.
All public-interest entities must, unless otherwise provided for by the Audit Law, set up an audit committee.
In the absence of specific cases, the CSSF has not yet set out the conditions under which public-interest entities that have a body performing functions equivalent to those of an audit committee may derogate from the obligation to set up an audit committee.
Henceforth, the audit committee has a more active role to play, its members must be mostly independent of the audited entity, competent in the entity’s field of activity and at least one of the members must have accounting and/or audit skills.
In addition to the tasks historically entrusted to it, namely ensuring:
it must now also:
The audit committee must also submit its recommendation to the administrative or supervisory body of the audited entity as part of the procedure for selecting the réviseur d’entreprises agréé or cabinet de révision agréé. This recommendation, except in the case of the renewal of a statutory audit, shall be justified and shall include at least two possible choices, from among the candidates, and shall indicate the duly justified preference of the audit committee for one of them. In other words, it will have to provide more support and supervision to the approved auditor and the approved audit firm in their work.
As independence is a pillar of the European texts, réviseurs d’entreprises agréés and cabinets de révision agréés must now confirm their independence each year in writing to the audit committee and discuss the risks to their independence and the safeguards applied to mitigate these risks. This is particularly true in the case of non-audit services provided to the audited entity.
The CSSF will have to evaluate the work of these audit committees and report to the European Commission. The regulator has been given the option of sanctioning the least diligent audit committees.