ecoDa/PwC – Press Release – Guidance for audit committees on the EU audit legislation


EU Audit legislation, which came into force last Friday, introduces more detailed requirements regarding the statutory audit of ‘Public Interest Entities’ (PIEs). According to the EC press release[1] at the time of adoption, the legislation aims to improve audit quality and to restore investor confidence in financial information, by:

  • Reinforcing the independence of the statutory auditor – Contributing to a more dynamic audit market in the EU
  • Reinforcing the role and competence of the audit committee

Given that the functions assigned to audit committees have been extended in various ways, the European Confederation of Directors’ Associations (ecoDa) in cooperation with PwC has decided to help audit committee members understand the main changes by providing a description of aspects of the new legislation, focusing on the composition and governance of audit committees, selection and appointment of the audit firm, monitoring the auditor’s independence, auditor reporting requirements and oversight.

Many companies have yet to assess the full implications of the reform and are still in the process of getting ready to adapt to these changes.

The new EU regulatory framework contains a number of Member State options; for each of these aspects, flexibility is left to the Member States to opt for lighter or stricter rules. Flexibility in governance matters is a good policy in general, however, it is important that the final national implementing laws result in a coherent framework that enhances audit quality and leaves audit committees in a situation where they can properly perform their new duties.

As stated by Turid Solvang (ecoDa’s Chair), “Putting Audit Committees at the heart of the audit reform acknowledges their important role. The interpretation of the legislation by the all Member States should be consistent with the initial spirit of the European Commission”.

Jan McCahey, PwC Global Regulatory Leader stated: “Audit committees have an important role to play in robust corporate governance. It will take time for all to become familiar with the EU audit legislation and for best practice to emerge; the guide is designed to help audit committees understand the practical implications and offer some examples of good practice”.

The guidance will be released during an event on 21 June 2016 in Brussels, where audit committee members will discuss aspects of the guide and exchange best practice.

UK: The British Institute of Directors and the Brexit – ecoDa Week Alert N. 23


ecoDa Week Alert N. 23

It includes:

  1. Capital markets Union: Council agrees its stance on prospectus rules for the issuing and offering of securities
  2. European Shareholders’ Rights Directive Proposals: An academic paper on ‘A critical analysis in mapping with the UK Stewardship Code?’
  3. European Commission’s consultation on the Financial Conglomerates Directives
  4. UK: the Institute of Chartered Secretaries and Administrators consultation on the practice of minuting meetings
  5. UK Financial Reporting Council: Lab call for participants – Digital Future: Data
  6. UK: The British Institute of Directors and the Brexit. The findings of an extensive survey on the UK’s relationship with the European Union
  7. ecoDa’s News

EU Parliament’s report on The cost of Non-Europe in the Sharing Economy – ecoDa Week Alerts N. 21-22


ecoDa Week Alerts N. 21-22

They include:

  1. European Banking Authority: Boards’ Composition / Time commitments
  2. EU Parliament’s report on The cost of Non-Europe in the Sharing Economy: Economic, Social and Legal Challenges and Opportunities
  3. The International Integrated Reporting Council Stakeholders Feedback survey
  4. An UK Think Tank questioning time and resources of non-executive directors
  5. Uk: The Financial Reporting Council feedback statement on board succession planning discussion paper
  6. UK: a review of the corporate insolvency framework
  7. European Commission’s Additional Q&A on the Implementation of the New Statutory Audit Reform
  8. Eurosif and the Italian Sustainable Investment Forum Conference on “Can long-term investing unlock the potential of the Capital Markets Union?”
  9. US: Proposed legislation on Oversight of Proxy Advisory Firms
  10. Harvard Business Review’s article on Digital Leaders
  11. EY’s report on Disruption in the boardroom
  12. The European Corporate Governance Research Foundation’s Conference
  13. ecoDa’s News