The Ministry of Finance has issued a draft act amending the Authorised Public Accountants Act and other acts to be circulated for approval, reducing the administrative burden for both the private and the public sector.
As the amendments enter into force, certificates for sworn auditors will be issued by the auditing supervisory board of the Estonian Board of Auditors. Until now, this has been the task of the Finance Minister acting upon recommendations from the Board of Auditors.
“A quality auditing service is an important public good, ensuring the reliability of vital financial information for entrepreneurs and investors,“ Finance Minister Sven Sester said. “I have confidence in the high level of self-regulation of sworn auditors, so we can entrust them with functions previously performed by the Ministry of Finance. As a professional organisation, the Board of Auditors has grown and strengthened over the years.“
The auditing supervisory board of the Estonian Board of Auditors shall also take over other tasks relating to the approval of sworn auditors and issuance of activity licences previously performed by the Ministry of Finance. The releasing of the Ministry of Finance from issuing and revoking professional certificates and activity licences and other relating tasks enables it to focus on legislative functions.
The professional organisation shall become responsible for approval and registration of sworn auditors and firms of auditors, adoption of quality assurance standards and codes of ethics, managing professional training as well as quality management systems and rules for investigation and administrative discipline. In all, the upcoming amendments should shorten proceedings, reducing the administrative burden and saving money. The existing three-layer supervision system will be replaced by a two-layer system. The Ministry of Finance will continue to supervise the Board of Auditors.
According to the draft, public-interest entities include listed companies, insurance undertakings and banks. The scope of public interest entities shall be reduced to the minimum permitted by the EU directive. Such limitation of the definition of public-interest entities serves to avoid excessive administrative burden for the public and private sector: according to EU law, auditing of public-interest entities shall be subject to increasingly detailed reporting and a number of other stringent rules.
According to the draft, contracts for statutory auditing of annual accounts must be concluded for at least two years. The longer-term contract requirement shall help improve the quality of the auditing services.
The amendments are planned to enter into force on 1 January 2017. The draft will align Estonian law with the EU directive on statutory audits of annual accounts and consolidated accounts (2014/56/EU). The draft is part of the government’s programme for developing business environment and making Estonia the world’s most attractive region for doing business.
The draft act is available in the government’s information system (in Estonian).
Source: Estonian Ministry of Finance
Filed under: Legislation |