Why are there stricter requirements for the audit of public-interest entities (PIEs)?Stricter requirements govern the statutory audit of PIEs because the potential negative consequences of misstatements for shareholders, investors and more broadly society at large, are usually greater than for other types of undertakings.
The new framework covers all statutory audits required by EU law.
In addition, the new framework also covers audits for small undertakings and audits voluntarily conducted by small undertakings, where defined by national legislation as statutory audits.
The new rules follow an extensive consultation process which started with the Commission's Green Paper on Audit Policy in October 2010 (see The reform rests on two pillars, encompassing both horizontal and specific measures.
The following horizontal measures apply to all statutory auditors and audit firms, regardless of whether the audited entity is a public-interest entity or not: What types of audits are covered?
A first group of legal instruments requires certain types of legal entities (depending on their legal form) to have their accounts audited. The new rules address a number of shortcomings observed on the audit market: What are the main objectives of the reform of statutory audit?