Defining Issues | April 2016
 

EU audit reforms: the countdown begins

KPMG reports on EU audit reformation and transition requirements. With the EU reform soon to come into full effect, KPMG examines where EU countries stand in adopting the legislation and discusses transition requirements.

Applicability

  • Company with an EU parent or subsidiary that is listed
  • Company with an EU parent or subsidiary that has banking or insurance activities

Relevant dates

  • June 17, 2016 – EU audit reforms require mandatory audit firm rotation and prohibit certain non-audit services for an EU company that is determined to be an EU Public Interest Entity (PIE)

Key impacts

US companies may need to:

  • Rotate auditors on some of their subsidiaries
  • Limit the non-audit services that their auditors provide
  • Establish committees for their EU PIE subsidiaries and obtain additional approvals for services

Report contents

  • How will US companies be affected?
  • Mandatory audit firm rotation
  • Prohibitions against non-audit services
  • Countries diverging from baseline requirements

 

 

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