### this directive should specify the minimum obligations which insurance undertakings and insurance intermediaries should have in providing information to customers . a member state should be able to in this area maintain or adopt more stringent provisions which may be imposed on insurance intermediaries and insurance undertakings independently of the provisions of their home member state where they are pursuing insurance mediation activities on its territory provided that any such more stringent provisions comply with union law , including directive 2000 / 31 / ec of the european parliament and of the council of 8 june 2000 on certain legal aspects of information society services , in particular electronic commerce , in the internal market . a member state which proposes to apply and applies provisions regulating insurance intermediaries and the sale of insurance products in addition to those set out in this directive should ensure that the administrative burden stemming from these provisions is proportionate for consumer protection . in the interest of consumer protection and in order to prevent mis - selling of insurance products , member states should be permitted to apply exceptionally the more stringent requirements to such insurance intermediaries conducting insurance mediation on an ancillary basis if they consider it necessary and proportionate . ### this directive should specify the minimum obligations for insurance undertakings and insurance intermediaries . a member state should be able to maintain or adopt more stringent provisions which may be imposed on insurance intermediaries and insurance undertakings . such more stringent provisions must comply with union law , including directive 2000 / 31 / ec of the european parliament and of the council of 8 june 2000 on certain legal aspects of information society services , in particular electronic commerce , in the internal market .


### when an insurance service or product is offered together with another service or product as a package , the insurance undertaking or , where applicable , the insurance intermediary shall offer and inform the customer that it is possible to buy the components of the package separately and shall provide information of the costs and charges of each component of the package that may be bought through or from it separately . ### when insurance is offered together with another service or product as a package , the insurance undertaking or , where applicable , the insurance intermediary shall inform the customer whether it is possible to buy the components of the package separately and , if so shall provide information of the costs and charges of each component of the package that may be bought through or from it separately .


### when an insurance service or product is offered together with another service or product as a package , the insurance undertaking or , where applicable , the insurance intermediary shall offer and inform the customer that it is possible to buy the components of the package separately and shall provide information of the costs and charges of each component of the package that may be bought through or from it separately . ### when an insurance service or product is offered together with another service or product as a package , the insurance undertaking or , where applicable , the insurance intermediary should inform the customer whether it is possible to buy the components of the package separately and shall provide information of the costs and charges of each component of the package that may be bought through or from it separately .


### where steps taken by the insurance intermediary or insurance undertaking in compliance with articles 15 , 16 and 17 are not sufficient to ensure , with reasonable confidence , that risks of damage to the interests of customers and potential customers arising from conflicts of interest will be prevented , the insurance intermediary or insurance undertaking shall clearly disclose the general nature or sources of conflicts of interest to the customer before undertaking business on the customer ' s behalf . ### an insurance intermediary or insurance undertaking shall maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest from adversely affecting the interests of its customers . where steps taken by the insurance intermediary or insurance undertaking are not sufficient to ensure , with reasonable confidence , that risks of damage to the interests of customers and potential customers arising from conflicts of interest will be prevented , the insurance intermediary or insurance undertaking shall clearly disclose the general nature or sources of conflicts of interest to the customer before undertaking business on the customer ' s behalf .


### where the host member state has grounds for concluding that an insurance or reinsurance intermediary acting within its territory under the freedom to provide services or through an establishment is in breach of any obligation set out in this directive it shall refer those findings to the competent authority of the home member state which shall take the appropriate measures . in cases where , despite measures taken by the competent authority of the home member state , an insurance or reinsurance intermediary persists in acting in a manner that is clearly prejudicial to the interests of host member state consumers or the orderly functioning of insurance and reinsurance markets , the insurance or reinsurance intermediary shall be subject to the following measures : ### where the host member state has grounds for concluding that an insurance or reinsurance intermediary acting within its territory under the freedom to provide services or through an establishment is in breach of any obligation set out in this directive , and where the host member state does not have powers under this directive to take action in response to such breaches , it shall refer those findings to the competent authority of the home member state which shall take the appropriate measures . in cases where , despite measures taken by the competent authority of the home member state , an insurance or reinsurance intermediary persists in acting in a manner that is clearly prejudicial to the interests of host member state consumers or the orderly functioning of insurance and reinsurance markets , the insurance or reinsurance intermediary shall be subject to the following measures :


### where steps taken by the insurance intermediary or insurance undertaking in compliance with articles 15 , 16 and 17 are not sufficient to ensure , with reasonable confidence , that risks of damage to the interests of customers and potential customers arising from conflicts of interest will be prevented , the insurance intermediary or insurance undertaking shall clearly disclose the general nature or sources of conflicts of interest to the customer before undertaking business on the customer ' s behalf . ### an insurance intermediary or insurance undertaking shall maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest from adversely affecting the interests of its customers . where steps taken by the insurance intermediary or insurance undertaking are not sufficient to ensure , with reasonable confidence , that risks of damage to the interests of customers and potential customers arising from conflicts of interest will be prevented , the insurance intermediary or insurance undertaking shall clearly disclose the general nature and sources of conflicts of interest and the steps taken to mitigate those risks to the customer .


### member states may stipulate that , where an insurance or reinsurance intermediary acts under the responsibility of an insurance or reinsurance undertaking or of another registered insurance or reinsurance intermediary , the latter intermediary or the undertaking shall be responsible for ensuring that it meets the conditions for registration set out in this directive . in such a case , the person or entity accepting responsibility shall , having been informed by the member states of the matters set out in paragraph 7 of this article , sub - paragraphs and , be satisfied as to the matter set out in paragraph 7 of this article , sub - paragraph . member states may also stipulate that the person or entity which takes responsibility for the intermediary shall register that intermediary . ### member states may stipulate that , where an insurance or reinsurance intermediary acts under the responsibility of an insurance or reinsurance undertaking or of another registered insurance or reinsurance intermediary , the insurance intermediary shall not be required to provide the competent authority with the information in points and of article 3 and the insurance entity responsible shall ensure that the insurance intermediary meets the conditions for registration and other provisions set out in this directive . member states may also stipulate that the person or entity which takes responsibility for the intermediary shall register that intermediary .


### member states shall ensure the setting - up of appropriate , effective , impartial and independent complaints and redress procedures for the out - of - court settlement of disputes between insurance intermediaries and customers , and between insurance undertakings and customers , using existing bodies where appropriate . member states shall further ensure that all insurance undertakings and insurance intermediaries participate in the procedures for the out - of - court settlement of disputes where the following conditions are met : ### member states shall ensure the setting - up of appropriate , effective , impartial and independent complaints and redress procedures for the out - of - court settlement of disputes between insurance intermediaries and customers , and between insurance undertakings and customers , using existing bodies where appropriate .


### member states may stipulate that , where an insurance or reinsurance intermediary acts under the responsibility of an insurance or reinsurance undertaking or of another registered insurance or reinsurance intermediary , the latter intermediary or the undertaking shall be responsible for ensuring that it meets the conditions for registration set out in this directive . in such a case , the person or entity accepting responsibility shall , having been informed by the member states of the matters set out in paragraph 7 of this article , sub - paragraphs and , be satisfied as to the matter set out in paragraph 7 of this article , sub - paragraph . member states may also stipulate that the person or entity which takes responsibility for the intermediary shall register that intermediary . ### member states may stipulate that , where an insurance or reinsurance intermediary acts under the responsibility of an insurance or reinsurance undertaking or intermediary , the insurance intermediary shall not provide the competent authority with the registration information in article 3 and the insurance intermediary or undertaking responsible shall ensure that their insurance intermediary meets the conditions for registration and other provisions set out in this directive . member states may also stipulate that the person or entity which takes responsibility for the intermediary shall register that intermediary .


### this directive should specify the minimum obligations which insurance undertakings and insurance intermediaries should have in providing information to customers . a member state should be able to in this area maintain or adopt more stringent provisions which may be imposed on insurance intermediaries and insurance undertakings independently of the provisions of their home member state where they are pursuing insurance mediation activities on its territory provided that any such more stringent provisions comply with union law , including directive 2000 / 31 / ec of the european parliament and of the council of 8 june 2000 on certain legal aspects of information society services , in particular electronic commerce , in the internal market . a member state which proposes to apply and applies provisions regulating insurance intermediaries and the sale of insurance products in addition to those set out in this directive should ensure that the administrative burden stemming from these provisions is proportionate for consumer protection . in the interest of consumer protection and in order to prevent mis - selling of insurance products , member states should be permitted to apply exceptionally the more stringent requirements to such insurance intermediaries conducting insurance mediation on an ancillary basis if they consider it necessary and proportionate . ### this directive should specify the minimum obligations for insurance undertakings and insurance intermediaries . a member state should be able to maintain or adopt more stringent provisions which may be imposed on insurance intermediaries and insurance undertakings . such more stringent provisions must comply with union law .


### chapters ii to iv of this regulation shall not apply to products subject to requirements designed to protect human health and safety laid down in union harmonisation legislation or pursuant to it . ### this regulation shall not apply to products subject to requirements designed to protect human health and safety laid down in union harmonisation legislation or pursuant to it .


### individual undertakings shall ensure that the vehicles which they operate are in a good roadworthy condition at all times . ### individual undertakings shall ensure that the condition of the vehicles which they operate meets all legal requirements , guaranteeing that the vehicles are road safe throughout their period of use .


### ‘ roadworthiness test’ means a verification that the parts and components of a vehicle comply with its safety and environmental characteristics at the time of approval , first registration or entry into service , or at the time of retrofitting ; ### ' roadworthiness test ' means an inspection to ensure that a vehicle is safe to be used on public roads and complies with required environmental characteristics .


### a statutory auditor or audit firm shall take all necessary steps to ensure that the carrying out of a statutory audit of a public - interest entity is not affected by any existing or potential conflict of interest or business or other relationship involving the statutory auditor or audit firm carrying out the statutory audit and , where appropriate , its network , managers , auditors , employees , any other natural persons whose services are placed at the disposal or under the control of the statutory auditor or audit firm , or any person directly or indirectly linked to the statutory auditor or audit firm by control . ### a statutory auditor or audit firm shall take all reasonable steps to ensure that the independence of the statutory auditor or audit firm carrying out a statutory audit is not compromised by financial , personal , business , employment or other relationships involving the statutory auditor , the audit firm , its network , or any natural person in a position to directly or indirectly influence the outcome of the statutory audit .


### valuation services , providing fairness opinions or contribution - in - kind reports ; ### valuation services , including valuations in connection with actuarial services or litigation support services , where the valuation would have a material effect , separately or in the aggregate , on the financial statements ;


### in its recommendation , the audit committee shall state that its recommendation is free from influence by a third party and that no contractual clause as referred to in paragraph 7 has been imposed upon it . ### the audit committee shall state that its recommendation is free from influence by a third party and that no contractual clause as referred to in paragraph 7 has been imposed upon it .


### providing certification on compliance with tax requirements where such attestation is required by national law ; ### providing certification on compliance with tax requirements ;


### the competent authorities shall in particular assess the following : ### the competent authorities referred to in the first sub paragraph shall in particular assess the following :


### human resources services , including recruiting senior management ; &#160 ; ### human resources services with respect to senior management in a position to exert significant influence over the preparation of the accounting records or financial statements subject to the statutory audit , where such services involve : searching for or seeking out candidates for such positions ; or undertaking reference checks of candidates for such positions .


### in order to take account of the technical developments in the financial markets , in auditing and the audit profession and to specify the requirements laid down in this regulation , the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty on the functioning of the european union . in particular , the use of delegated acts is necessary to adapt the list of related audit services and of non - audit services as well as to set out the level of fees that esma could charge for delivering the european quality certificate to statutory auditors and audit firms . it is of particular importance that the commission carries out appropriate consultations during its preparatory work , including at expert level . the commission , when preparing and drawing up delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the european parliament and to the council . ### in order to take account of the technical developments in the financial markets , in auditing and in the audit profession , and to specify the requirements laid down in this regulation , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission in respect of adapting the list of related audit services and of non - audit services . it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level . the commission , when preparing and drawing up delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the european parliament and to the council .


### where the statutory auditor belongs to a network , no member of such network shall provide to the audited entity , to its parent undertaking and to its controlled undertakings within the union any non - audit services . ### where the statutory auditor belongs to a network , no member of such network shall provide to the audited entity , to its parent undertaking or to its controlled undertakings within the union any prohibited non - audit services .


### describe the distribution of tasks among the statutory auditors and / or the audit firm ; ### include a description of the scope and timing of the audit , and where relevant describe : – the distribution of tasks among the statutory auditors and / or the audit firm ; and – which audit work has been performed by third - country auditor , statutory auditor , third - country audit entity or audit firm in the case of a statutory audit of consolidated financial statements ;


### the audit report shall not be longer than four pages or 10000 characters . it shall not contain any cross - references to the additional report to the audit committee referred to in article 23 . ### the audit report shall not contain any cross - references to the additional report to the audit committee referred to in article 23 .


### in the case of a credit institution or insurance undertaking , the administrative or supervisory board shall submit its draft proposal to the competent authority referred to in article 35 . the competent authority referred to in article 35 shall have the right to veto the choice proposed in the recommendation . any such opposition shall be duly justified . the absence of a reply by the competent authority within the prescribed time - limit following submission of the audit committee ' s recommendation shall be considered as constituting an implied consent to the recommendation . ### in the case of a credit institution or insurance undertaking , the administrative or supervisory board shall submit its draft proposal to the competent authority referred to in article 35 who shall submit them to esma . esma shall consult on such proposals with eba and eiopa . the competent authority referred to in article 35 shall have the right to veto the choice proposed in the recommendation . any such opposition shall be duly justified and notified to esma . the absence of a reply by the competent authority or esma within the prescribed time - limit following submission of the audit committee ' s recommendation shall be considered as constituting an implied consent to the recommendation .


### in is the instance of the audited entity being exempted from the obligation to have an audit committee , the audited entity shall decide which body or organ of the entity shall engage with the statutory auditor or audit firm for the purposes of the obligations set out in this article . ### where the audited entity is exempted from the obligation to have an audit committee , the audited entity shall decide which body or organ of the entity is to engage with the statutory auditor or audit firm for the purposes of the obligations set out in this article .


### the public - interest entity shall appoint a statutory auditor or audit firm for an initial engagement that shall not be shorter than two years . the public - interest entity may renew this engagement only once . the maximum duration of the combined two engagements shall not exceed 6 years . where throughout a continuous engagement of 6 years two statutory auditors or audit firms have been appointed , the maximum duration of the engagement of each statutory auditor or audit firm shall not exceed 9 years . ### the public - interest entity shall appoint a statutory auditor or audit firm for an initial engagement of one year . the public - interest entity may renew this engagement on an annual basis provided that , prior to the appointment or re - appointment , either : the audit committee has reported to the board that it has carried out an assessment of the threats to the independence of the statutory auditor or audit firm , as required by article 31 , and is satisfied that the statutory audit or audit firm has been able to and is likely to be able to continue to mitigate any threats to its independence ; or where the competent authority has chosen to exercise its power under article 38 , that authority has provided the entity with a statement affirming that it has no reason to object to the appointment of the auditor on the grounds of independence . if neither the conditions laid down in point nor those laid down in point are complied with , the audit committee shall not recommend the statutory auditor or audit firm for reappointment . the maximum unbroken duration of an audit engagement to a public - interest entity shall not exceed 25 years . the public - interest entity shall report at least every seven years to the competent authority that it has carried out an assessment of the threats to the independence of the statutory auditor or audit firm , as required by article 31 , and is satisfied that the statutory auditor or audit firm is likely to be able to mitigate any threats to its independence .


### the disclosure in good faith to the competent authorities , by the statutory auditor or audit firm , of any fact or decision referred to in paragraph 1 or of any fact during the dialogue foreseen in paragraph 2 shall not constitute a breach of any contractual or legal restriction on disclosure of information and shall not involve such persons in liability of any kind . ### the disclosure in good faith to the competent authorities or to the bodies responsible for financial stability , by the statutory auditor or audit firm , of any fact , information , opinion or decision referred to in paragraph 1 or of any fact , information or opinion emerging during the dialogue provided for in paragraph 2 shall not constitute a breach of any contractual or legal restriction on disclosure of information and shall not involve such persons in liability of any kind .


### authorise , on a case by case basis , the provision by the statutory auditor or audit firm of the services referred to in article 10 and of this regulation to the audited entity . ### approve the provision by the statutory auditor or audit firm of non - audit services as referred to in article 10 to the audited entity and its controlled undertakings within the union .


### if his , her or its independence is affected , the statutory auditor or the audit firm shall apply safeguards in order to mitigate the threats caused by such provision of services in a third country . the statutory auditor or the audit firm may continue to carry out the statutory audit of the public - interest entity only if he , she or it can justify , in accordance with article 11 , that such provision of services does not affect his , her or its professional judgement and the audit report . ### the statutory auditor or the audit firm may continue to carry out the statutory audit of the public - interest entity only if he , she or it can justify , in accordance with article 11 , that such provision of services does not affect his , her or its professional judgement and the audit report .


### give an opinion which shall state clearly the opinion of the statutory auditor or the audit firm as to whether the annual or consolidated financial statements give a true and fair view and have been prepared in accordance with the relevant financial reporting framework and , where appropriate , whether the annual or consolidated financial statements comply with statutory requirements ; the audit opinion shall be either unqualified , qualified , an adverse opinion or , if the statutory auditor or audit firm are unable to express an audit opinion , a disclaimer of opinion . in case of a qualified or an adverse opinion or a disclaimer of opinion , the report shall explain the reasons of such decision ; ### give an opinion which shall state clearly the opinion of the statutory auditor or the audit firm as to whether the annual or consolidated financial statements give a true and fair view of the financial position of the individual entity or consolidated group and of its financial performance and its cash flows in accordance with the relevant financial reporting framework and , comply with statutory accounting requirements ; the audit opinion shall be either unmodified , qualified , an adverse opinion or , if the statutory auditor or audit firm are unable to express an audit opinion , a disclaimer of opinion . in the case of a qualified or an adverse opinion or a disclaimer of opinion , the audit report shall explain the reasons of such decision ;


### explain , where additional reports have been reviewed , the scope of such review ; ### report concerning whether the consistency , in all material respects , or otherwise of the management report or consolidated management report with other reports accompanying the annual financial statements or consolidated financial statements , respectively , for the same financial year , and report on whether , based on the audit , the auditor has identified material inconsistencies between the audited financial statements and any other information in a document , if any , containing or accompanying those financial statements , and to clearly identify in the auditor ' s report that other information and include a description of the auditor ' s responsibilities in this regard in accordance with the requirements of the international auditing standards as referred to in article 26 of directive 2006 / 43 / ec .


### in a report to be prepared by esma by x x 20xx [ four years after the entry into force of the regulation ] , shall examine whether the competent authorities referred to in article 35 are sufficiently empowered and have adequate resources to carry out their tasks . ### in a report to be prepared by esma by x x 20xx [ four years after the entry into force of the regulation ] , it shall examine whether the competent authorities referred to in article 35 are sufficiently empowered and have adequate resources to carry out their tasks .


### common standards on the content and presentation of the report referred to in article 22 ; ### common standards on the content and presentation of the report referred to in article 22 , within the framework of the international auditing standards as referred to in article 20 ;


### in order to take account of the technical developments in the financial markets , in auditing and the audit profession and to specify the requirements laid down in this regulation , the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty on the functioning of the european union . in particular , the use of delegated acts is necessary to adapt the list of related audit services and of non - audit services as well as to set out the level of fees that esma could charge for delivering the european quality certificate to statutory auditors and audit firms . it is of particular importance that the commission carries out appropriate consultations during its preparatory work , including at expert level . the commission , when preparing and drawing up delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the european parliament and to the council . ### in order to take account of the technical developments in the financial markets , in auditing and the audit profession and to specify the requirements laid down in this regulation , the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty on the functioning of the european union . in particular , the use of delegated acts is necessary to adapt the list of related audit services and of prohibited non - audit services as well as to set out the level of fees that esma could charge for delivering the european quality certificate to statutory auditors and audit firms . it is of particular importance that the commission carries out appropriate consultations during its preparatory work , including at expert level and with esma . the commission , when preparing and drawing up delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the esma , european parliament and to the council .


### when carrying out the statutory audit of a public - interest entity , the statutory auditor or audit firm shall maintain professional scepticism throughout the audit , recognizing the possibility that a material misstatement due to facts or behaviour indicating irregularities , including fraud or error could exist , notwithstanding the auditor ' s or firm ' s past experience of the honesty and integrity of the audited entity ' s management and of the persons charged with its governance . ### when carrying out the statutory audit of a public - interest entity , the statutory auditor or audit firm shall maintain professional scepticism throughout the audit , recognising the possibility that a material misstatement due to facts or behaviour indicating irregularities , including fraud or error could exist , notwithstanding the auditor ' s or firm ' s past experience of the honesty and integrity of the audited entity ' s management and of the persons charged with its governance , as required by the international auditing standards referred to in article 26 of directive 2006 / 43 / ec .


### for the purposes of this article , related financial audit services shall mean : ### for the purposes of this article , audit - related and other assurance services shall mean :


### it is also important that the role of the audit committee in the selection of a new statutory auditor or audit firm be reinforced , for the benefit of a more informed decision of the general meeting of shareholders or members of the audited entity . hence , when making a proposal to the general meeting , the board should explain whether it follows the recommendation of the audit committee and , if not , why . the recommendation of the audit committee should include at least two possible choices for the audit engagement and a duly justified preference for one of them , so that the general meeting can make a real choice . in order to provide a fair and proper justification in its recommendation , the audit committee should use the results of a mandatory selection procedure organised by the audited entity , under the responsibility of the audit committee . in such selection procedure , the audited entity should invite statutory auditors or audit firms , including smaller ones , to present proposals for the audit engagement . tender documents should contain transparent and non - discriminatory selection criteria to be used for the evaluation of proposals . considering , however , that this selection procedure could entail disproportionate costs for companies with reduced market capitalisation or small and medium - sized public - interest entities having regard to their dimension , it is appropriate to relieve such entities from this obligation . ### it is also important that the role of the audit committee in the selection of a new statutory auditor or audit firm be reinforced , for the benefit of a more informed decision of the general meeting of shareholders or members of the audited entity . hence , when making a proposal to the general meeting , the board should explain whether it follows the recommendation of the audit committee and , if not , why . the recommendation of the audit committee should include at least two possible choices for the audit engagement and a duly justified preference for one of them , so that the general meeting can make a real choice . in order to provide a fair and proper justification in its recommendation , the audit committee should use the results of a mandatory selection procedure organised by the audited entity , under the responsibility of the audit committee . in such selection procedure , the audited entity should invite statutory auditors or audit firms , including non - dominant ones , to present proposals for the audit engagement . tender documents should contain transparent and non - discriminatory selection criteria to be used for the evaluation of proposals . considering , however , that this selection procedure could entail disproportionate costs for companies with reduced market capitalisation or small and medium - sized public - interest entities having regard to their dimension , it is appropriate to relieve such entities from this obligation .


### in a report to be prepared by x x 20xx [ two years after the entry into force of the regulation ] , esma shall undertake an evaluation of the structure of the audit market . ### in a report to be prepared by x x 20xx [ two years after the entry into force of the regulation ] , esma , following the advice of the european competition network , shall undertake an evaluation of the structure of the audit market .


### designing and implementing internal control or risk management procedure related to the preparation and / or control of financing information included in the financial statements and advice on risk ; ### designing or implementing internal control , risk management or financial information technology systems related to the preparation and / or control of financial information included in the financial statements that : form a significant part of the internal control over financial reporting of the audited entity , or generate information that is significant to the accounting records or financial statements that are subject to the statutory audit ;


### indicate and explain in detail all instances of non - compliance , including non - material instances as far as it is considered to be important to the audit committee in order to fulfil its tasks ; ### deleted ;


### the audit committee , one or more shareholders , the competent authorities referred to in article 35 or 35 shall be able to bring a claim before a national court for the dismissal of the statutory auditor or audit firm where there are proper grounds . ### the audit committee , one or more shareholders representing at least 5 per cent of the share capital , or the competent authorities referred to in article 35 or 35 shall be able to bring a claim before a national court for the dismissal of the statutory auditor or audit firm where there are proper grounds .


### the statutory auditor or the audit firm shall comply with the international auditing standards referred to in article 26 of directive 2006 / 43 / ec when carrying out the statutory audit of public - interest entities as long as those standards are in conformity with the requirements of this regulation . ### the statutory auditor or the audit firm shall comply with the international auditing standards referred to in article 26 of directive 2006 / 43 / ec when carrying out the statutory audit of public - interest entities .


### confirm annually in writing to the audit committee his , her or its independence from the audited entity ; ### confirm annually in writing to the audit committee that the statutory auditor , the audit firm , and audit partners , senior managers and managers conducting the statutory audit are independent from the audited entity ;


### however , article 32 shall apply from [ … ] [ the date of the entry into force of the regulation ] and article 10 shall apply from [ … ] [ 3 years after the entry into force of the regulation ] . ### however , article 32 shall apply from [ … ] [ the date of the entry into force of the regulation ] .


### the provision of services other than statutory audit to audited entities by statutory auditors , audit firms or members of their networks may compromise their independence . therefore , it is appropriate to require the statutory auditor , the audit firm and the members of their network not to provide non - audit services to their audited entities . the provision of non - audit services by an audit firm to a company would prevent that audit firm from carrying out statutory audit of that company , thus resulting in a reduction of the audit firms available to provide statutory audit , in particular with regard to the audit of large public - interest entities where the market is concentrated . as a result , in order to secure that a minimum number of audit firms is able to provide audit services to large public - interest entities , it is appropriate to request that audit firms of significant dimension focus their professional activity on the carrying out of statutory audit and are not allowed to undertake other services unconnected to their statutory audit function such as consultancy or advisory services . ### the provision of services other than statutory audit to audited entities by statutory auditors , audit firms or members of their networks may compromise their independence . therefore , it is appropriate to require the statutory auditor , the audit firm and the members of their network not to provide certain non - audit services to their audited entities . a statutory auditor or audit firm should be able to provide audit - related and other assurance services and non - audit services other than prohibited non - audit services where the provision of those services has been approved in advance by the audit committee and has not been subject to veto by the competent authority .


### include a declaration of independence as provided for in point of article 22 ; ### include a declaration of independence ;


### unless it concerns the renewal of an audit engagement in accordance with the second subparagraph of article 33 , the recommendation of the audit committee referred to in paragraph 2 of this article , shall be prepared following a selection procedure organized by the audited entity respecting the following criteria : ### the recommendation of the audit committee referred to in paragraph 2 shall be prepared following a selection procedure organised by the audited entity respecting the following criteria :


### a statutory auditor or an audit firm carrying out statutory audit of public - interest entities shall not directly or indirectly provide to the audited entity , to its parent undertaking and to its controlled undertakings non - audit services . ### a statutory auditor or an audit firm carrying out statutory audit of public - interest entities shall not directly or indirectly provide to the audited entity , to its parent undertaking or to its controlled undertakings prohibited non - audit services .


### when more than one statutory auditor or audit firm have been appointed to carry out the statutory audit of the public - interest entity , they shall agree on the results of the statutory audit and submit a joint report and opinion . in case of disagreement , each statutory auditor or audit firm shall submit his , her or its opinion separately . if one statutory auditor or audit firm qualifies his , her or its opinion , submits an adverse opinion or a disclaimer of opinion , the overall opinion shall be considered as qualified , adverse opinion or a disclaimer of opinion . in a separate paragraph each statutory auditor or audit firm shall state the reasons of disagreement . ### when more than one statutory auditor or audit firm have been appointed to carry out the statutory audit of the public - interest entity , they shall agree on the results of the statutory audit and submit a joint report and opinion .


### indicate the date of the appointment and the period of total uninterrupted engagement including previous renewals and reappointments ; ### if not already disclosed in the management report or the annual financial statements for the same financial year , indicate the date of the appointment of the statutory auditor or the audit firm and the period of total uninterrupted engagement including previous renewals and reappointments of the statutory auditor or the audit firm ;


### a statutory auditor or an audit firm shall have adequate remuneration policies providing sufficient performance incentives to secure audit quality . in particular , compensation and performance evaluation of employees shall not be contingent on the amount of revenue that the statutory auditor or the audit firm derives from the audited entity ; ### a statutory auditor or an audit firm shall have adequate remuneration or profit - sharing policies providing sufficient performance incentives to secure audit quality . in particular , the amount of revenue that the statutory auditor or the audit firm derives from selling non - assurance services to the audited entity shall not form part of the performance evaluation and compensation of any person involved in or able to influence the conduct of the audit ;


### the statutory auditor or the audit firm shall also have a duty to report any facts and decisions of which he , she or it becomes aware in the course of carrying out the statutory audit of an undertaking having close links with the public - interest entity for which he , she or it is also carrying out the statutory audit . ### the statutory auditor or the audit firm shall also have a duty to report any facts and decisions referred to in points , or of which he , she or it becomes aware in the course of carrying out the statutory audit of an undertaking whose financial information is incorporated or should be incorporated into the financial statements of the public - interest entity for which he , she or it is also carrying out the statutory audit .


### identify the dates of the meetings with the audit committee or the body performing equivalent functions within the audited entity ; ### describe the nature and extent of communication with the audit committee , the management body and the administrative or supervisory body of the audited entity , including the frequency of such communication ;


### the disclosure in good faith to the competent authorities , by the statutory auditor or audit firm , of any fact or decision referred to in paragraph 1 or of any fact during the dialogue foreseen in paragraph 2 shall not constitute a breach of any contractual or legal restriction on disclosure of information and shall not involve such persons in liability of any kind . ### the disclosure in good faith to the competent authorities or to the bodies responsible for financial stability , by the statutory auditor or audit firm , of any fact , information , opinion or decision referred to in paragraph 1 or of any fact , information or opinion emerging during the dialogue provided for in paragraph 2 shall not constitute a breach of any contractual or legal restriction on disclosure of information and shall not involve such persons in liability of any kind .


### a refusal to certify the financial statements or the expression of reservations . ### a refusal to issue an audit opinion on the financial statements or the issuing of an adverse disclaimed or qualified opinion .


### designing and implementing internal control or risk management procedure related to the preparation and / or control of financing information included in the financial statements and advice on risk ; ### designing or implementing internal control , risk management or financial information technology systems related to the preparation and / or control of financial information included in the financial statements that : form a significant part of the internal control over financial reporting of the audited entity , or generate information that is significant to the accounting records or financial statements that are subject to the statutory audit ;


### competent authorities supervising credit institutions and insurance undertakings shall establish regular a dialogue with the statutory auditors and audit firms carrying out the statutory audit of those institutions and undertakings . ### competent authorities supervising public interest entities referred to in article 3 , and shall establish regular a dialogue with the statutory auditors and audit firms carrying out the statutory audit of those institutions and undertakings . the competent authority and the statutory auditor or audit firm shall inform each other and the audited entity about relevant facts or decisions referred to in paragraph 1 . at least once a year , the esrb shall organise a meeting with the statutory auditors and audit firms or networks carrying out the statutory audit of any fsb identified systemically important financial institutions in order to inform the esrb of sectoral or any significant developments in those systemically important financial institutions .


### for the purposes of point of the first subparagraph , the competent authority referred to in article 35 shall make public a list of the auditors and audit firms concerned which shall be updated on an annual basis . the competent authority shall use the information provided by statutory auditors and audit firms pursuant to article 28 to make the relevant calculations . ### for the purposes of point of the first subparagraph , the competent authority referred to in article 35 shall make public a list of the auditors and audit firms concerned which shall be updated on an annual basis . the competent authority shall use the information provided by statutory auditors and audit firms pursuant to article 26 to make the relevant calculations .


### in a report to be prepared by esma by x x 20xx [ six years after the end of the transitional period ] , shall examine the following issues : ### in a report to be prepared by esma by x x 20xx [ six years after the end of the transitional period ] , it shall examine the following issues :


### provide a statement on the situation of the audited entity or , in case of the statutory audit of consolidated financial statements , of the parent undertaking and the group , especially an assessment of the entity ' s or the parent undertaking ' s and group ' s ability to meet its / their obligation in the foreseeable future and therefore continue as a going concern ; ### provide : a conclusion on the appropriateness of management ' s use of the going concern assumption in the preparation of the financial statements in accordance with the applicable financial reporting framework ; and a statement as to whether , based on the audit , the auditor has identified a material uncertainty related to events or conditions that may cast significant doubt about the entity ' s ability to continue as a going concern that the auditor believes needs to be disclosed in accordance with the applicable financial reporting framework ;


### where a statutory auditor or an audit firm carries out statutory audit of a public - interest entity which is part of a group of undertakings whose parent undertaking is situated in a third country , the confidentiality and professional secrecy rules referred to in article 23 of directive 2006 / 43 / ec shall not impede the transfer by the statutory auditor or audit firm of relevant documentation of the audit work performed to the group auditor situated in a third country if such documentation is exclusively necessary for the preparation of the audit of consolidated financial statements of the parent undertaking . ### where a statutory auditor or an audit firm carries out statutory audit of a public - interest entity which is part of a group of undertakings whose parent undertaking is situated in a third country , the confidentiality and professional secrecy rules referred to in article 23 of directive 2006 / 43 / ec shall not impede the transfer by the statutory auditor or audit firm of relevant documentation of the audit work performed to the group auditor situated in a third country if such documentation is necessary for the preparation of the audit of consolidated financial statements of the parent undertaking .


### specify the annual or consolidated financial statements and the date and period they cover ; ### identity of the title of each financial statement included in the annual or consolidated financial statements of the individual entity or consolidated group and state the date and period covered by the financial statements of the individual entity or consolidated group ;


### give an opinion which shall state clearly the opinion of the statutory auditor or the audit firm as to whether the annual or consolidated financial statements give a true and fair view and have been prepared in accordance with the relevant financial reporting framework and , where appropriate , whether the annual or consolidated financial statements comply with statutory requirements ; the audit opinion shall be either unqualified , qualified , an adverse opinion or , if the statutory auditor or audit firm are unable to express an audit opinion , a disclaimer of opinion . in case of a qualified or an adverse opinion or a disclaimer of opinion , the report shall explain the reasons of such decision ; ### give an opinion which shall state clearly the opinion of the statutory auditor or the audit firm as to whether the annual or consolidated financial statements give a true and fair view and have been prepared in accordance with the relevant financial reporting framework and , where appropriate , whether the annual or consolidated financial statements comply with statutory requirements ; in accordance with international standards on auditing the audit opinion shall be either unqualified , qualified , or an adverse opinion . in case of a qualified or an adverse opinion , the report shall explain the reasons of such decision . in the case of credit institutions and insurance undertakings , in accordance with article16 of regulation no 1093 / 2010 and of regulation no 1094 / 2010 respectively , the opinion of the statutory auditor or the audit firm shall state the ' going concern ' of the audited entity , where necessary , and inform the competent authority ;


### the statutory auditor or audit firm shall report to the audit committee on key matters arising from the statutory audit , and in particular on material weaknesses in internal control in relation to the financial reporting process . upon request of any of the parties , the statutory auditor or audit firm shall discuss these matters with the audit committee . ### the statutory auditor or audit firm shall report to the audit committee on key matters arising from the statutory audit , and in particular on material weaknesses in internal control in relation to the financial reporting process . upon request of any of the parties , the statutory auditor or audit firm shall discuss these matters with the audit committee , and , when more than one statutory auditor or audit firm have been appointed , the distribution of tasks between them .


### persons or firms referred to in paragraph 2 shall not solicit or accept money , gifts or favours from anyone with whom the statutory audit or audit firm has a contractual relationship . ### persons or firms referred to in paragraph 2 shall not solicit or accept gifts , hospitality or similar favours from the audited entity unless an objective , reasonable and informed third party would consider their value as trivial or inconsequential .


### the need to adopt measures to mitigate those risks . ### the need to adopt measures to mitigate those risks , which may be legally binding ;


### specify the annual or consolidated financial statements and the date and period they cover ; ### identify the title of each financial statement included in the annual or consolidated financial statements of the individual entity or consolidated group , and the date of , or period covered by each financial statement ;


### the competent authorities referred to in article 35 shall regularly monitor the developments in the market for providing statutory audit services to public - interest entities . ### the competent authorities referred to in article 35 and the european competition network shall regularly monitor the developments in providing high - quality statutory audit services to public - interest entities .


### in order to take account of the technical developments in the financial markets , in auditing and the audit profession and to specify the requirements laid down in this regulation , the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty on the functioning of the european union . in particular , the use of delegated acts is necessary to adapt the list of related audit services and of non - audit services as well as to set out the level of fees that esma could charge for delivering the european quality certificate to statutory auditors and audit firms . it is of particular importance that the commission carries out appropriate consultations during its preparatory work , including at expert level . the commission , when preparing and drawing up delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the european parliament and to the council . ### in order to take account of the technical developments in the financial markets , in auditing and in the audit profession , and to specify the requirements laid down in this regulation , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission in respect of adapting the list of related audit services and of non - audit services . it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level . the commission , when preparing and drawing up delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the european parliament and to the council .


### a statutory auditor or an audit firm shall create an audit file for each statutory audit carried out . the audit file shall contain at least the following data and documents , either in paper form or in electronic form : the contract between the statutory auditor or the audit firm and the audited entity , and any amendments thereto ; the correspondence with the audited entity related to the statutory audit ; an audit plan setting out the probable scope and method of the statutory audit ; a description of the nature and the extent of the auditing activities carried out ; the starting and ending dates of the phases of audit procedures set out in the audit plan ; the principal findings of the audit procedures carried out ; the conclusions drawn from the findings referred to under point ; the opinion of the statutory auditor or the key audit partner as evidenced by the drafts of the reports referred to in articles 22 and 23 ; the data recorded pursuant to article 11 , article 16 , articles 17 and 18 and 19 ; other relevant data and documents that are of importance in support of the reports referred to in articles 22 and 23 and for monitoring compliance with this regulation and other applicable legal requirements . ### a statutory auditor or an audit firm shall create an audit file for each statutory audit carried out . the audit file shall contain at least the documentation for the statutory audit carried out as required by the international standards on auditing referred to in article 26 of directive 2006 / 43 / ec . the statutory auditor or audit firm shall also document the data recorded pursuant to article 11 , article 16 , articles 17 and 19 . the statutory auditor or audit firm shall retain any other data and documents that are of importance in support of the reports referred to in articles 22 and 23 and for monitoring compliance with this regulation and other applicable legal requirements .


### the results of the statutory audit should be presented to the stakeholders in the audit report . in order to increase the confidence of stakeholders in the financial statements of the audited entity , it is particularly important that the audit report is well - founded and solidly substantiated and its content expanded to include additional information specific to the audit carried out . the audit report should in particular include sufficient information on the methodology used in the audit , especially how much of the balance sheet has been directly verified and how much has been based on system and compliance testing , on the levels of materiality applied to perform the audit , on the key areas of risk of material misstatements of the annual and consolidated financial statements , on whether the statutory audit was designed to detect fraud and , in the event of a qualified or adverse opinion or a disclaimer of opinion , on the reasons for such decision . ### the results of the statutory audit should be presented to the stakeholders in the audit report . in order to increase the confidence of stakeholders in the financial statements of the audited entity , it is particularly important that the audit report is well - founded and solidly substantiated and its content expanded to include additional information specific to the audit carried out .


### declare that the non - audit services referred to in article 10 were not provided and that the statutory auditor or the audit firm remained completely independent in conducting the audit . where the statutory audit was carried out by an audit firm , the report shall identify each member of the audit engagement team and shall state that all members remained completely independent and had no direct or indirect interest in the audited entity ; ### declare that the prohibited non - audit services referred to in article 10 were not provided and that the statutory auditor or the audit firm remained independent in conducting the audit ; declare that non - audit and non - assurance services provided to the audited public - interest entity other than those referred to in article 10 had appropriate involvement of the audit committee or have been approved by the audit committee . where the statutory audit was carried out by an audit firm , the report shall state that all members of the engagement team remained independent of the audited entity ;


### the annual financial report and the annual income statement shall show the total turnover divided into fees from the statutory audit of annual and consolidated financial statements of public - interest entities and entities belonging to a group of undertakings whose parent undertaking is a public - interest entity , fees from the statutory audit of annual and consolidated financial statements of other entities and fees charged for related financial audit services as defined in article 10 . ### the annual financial report and the annual income statement shall show the total turnover divided into fees from the statutory audit of annual and consolidated financial statements of public - interest entities and entities belonging to a group of undertakings whose parent undertaking is a public - interest entity , fees from the statutory audit of annual and consolidated financial statements of other entities and fees charged for audit - related and other assurance services and non - audit services other than prohibited non - audit services as defined in article 10 .


### the public - interest entity shall appoint a statutory auditor or audit firm for an initial engagement that shall not be shorter than two years . the public - interest entity may renew this engagement only once . the maximum duration of the combined two engagements shall not exceed 6 years . where throughout a continuous engagement of 6 years two statutory auditors or audit firms have been appointed , the maximum duration of the engagement of each statutory auditor or audit firm shall not exceed 9 years . ### the public - interest entity shall appoint a statutory auditor or audit firm for an initial engagement of one year . the public - interest entity may renew this engagement on an annual basis provided that , prior to the appointment or re - appointment , either : the audit committee has reported to the board that it has carried out an assessment of the threats to the independence of the statutory auditor or audit firm , as required by article 31 , and is satisfied that the statutory audit or audit firm has been able to and is likely to be able to continue to mitigate any threats to its independence ; or where the competent authority has chosen to exercise its power under article 38 , that authority has provided the entity with a statement affirming that it has no reason to object to the appointment of the auditor on the grounds of independence . if neither the conditions laid down in point nor those laid down in point are complied with , the audit committee shall not recommend the statutory auditor or audit firm for reappointment . the maximum unbroken duration of an audit engagement to a public - interest entity shall not exceed 25 years . the public - interest entity shall report at least every seven years to the competent authority that it has carried out an assessment of the threats to the independence of the statutory auditor or audit firm , as required by article 31 , and is satisfied that the statutory auditor or audit firm is likely to be able to mitigate any threats to its independence .


### esma shall create a permanent internal committee pursuant to article 41 of regulation no 1095 / 2010 for this purpose . such internal committee shall be at least composed of the competent authorities referred to in article 35 of this regulation . the competent authorities referred to in article 32 of directive 2006 / 43 / ec shall be invited to attend the meetings of such internal committee concerning matters related to approval and registration of statutory auditors and audit firms and relations with third countries in so far as relevant to the statutory audit of public - interest entities . ### esma shall create a permanent internal committee pursuant to article 41 of regulation no 1095 / 2010 for this purpose . such internal committee shall be at least composed of the competent authorities referred to in article 35 of this regulation and the competent authorities referred to in article 32 of directive 2006 / 43 / ec which heretofore constitute the european group of audit oversight bodies created by decision 2005 / 909 / ec .


### designing and implementing internal control or risk management procedure related to the preparation and / or control of financing information included in the financial statements and advice on risk ; ### designing or implementing internal control , risk management or financial information technology systems related to the preparation and / or control of financial information included in the financial statements that : form a significant part of the internal control over financial reporting of the audited entity , or generate information that is significant to the accounting records or financial statements that are subject to the statutory audit ;


### for the purposes of this article , non - audit services shall mean : ### for the purposes of this article , prohibited non - audit services shall mean :


### the right of the general meeting of shareholders or members of the audited entity to choose the statutory auditor or the audit firm would be of no value if the audited entity were to enter into a contract with a third party providing for a restriction of such choice . therefore any contractual clause entered into by the audited entity with a third party regarding the appointment or restricting the choice of a particular auditor or audit firm should be considered null and void . ### the right of the general meeting of shareholders or members of the audited entity to choose the statutory auditor or the audit firm would be of no value if the audited entity were to enter into a contract with a third party providing for a restriction of such choice . therefore any contractual clause entered into by the audited entity with a third party restricting the choice to particular auditors or audit firms should be considered null and void .


### specify the annual or consolidated financial statements and the date and period they cover ; ### identity of the title of each financial statement included in the annual or consolidated financial statements of the individual entity or consolidated group and state the date and period covered by the financial statements of the individual entity or consolidated group ;


### the competent authority making any such request shall inform esma of any request referred to in the first and second subparagraphs . ### the competent authority making any such request shall inform the commission of any request referred to in the first and second subparagraphs .


### without prejudice to article 55 of directive 2004 / 39 / ec , article 53 of directive 2006 / 48 / ec of the european parliament and of the council , article 15 of directive 2007 / 64 / ec , article 106 of directive 2009 / 65 / ec , the first paragraph of article 3 of directive 2009 / 110 / ec and article 72 of directive 2009 / 138 / ec of the european parliament and of the council , the statutory auditor or audit firm carrying out the statutory audit of a public - interest entity shall have a duty to report promptly to the competent authorities supervising public - interest entities any fact or decision concerning that public - interest entity of which he , she or it has become aware while carrying out that statutory audit and which is liable to bring about any of the following : ### without prejudice to article 55 of directive 2004 / 39 / ec , article 53 of directive 2006 / 48 / ec of the european parliament and of the council , article 15 of directive 2007 / 64 / ec , article 106 of directive 2009 / 65 / ec , the first paragraph of article 3 of directive 2009 / 110 / ec and article 72 of directive 2009 / 138 / ec of the european parliament and of the council , the statutory auditor or audit firm carrying out the statutory audit of a public - interest entity shall have a duty to report promptly to any authority responsible for supervising the public interest entity that it audits any information concerning that public - interest entity of which he , she or it has become aware while carrying out that statutory audit and which has brought about or is liable to bring about any of the following :


### sustainable audit capacity and a competitive market for statutory audit services in which there is a sufficient choice of audit firms capable of carrying out statutory audits of public - interest entities are required in order to ensure a smooth functioning of capital markets . esma should report on the changes brought in the audit market structure by this regulation . when carrying such analysis , esma should take into account the impact of the national civil liability rules for statutory auditors on the structure of the audit market . based on such report and other appropriate evidence , the commission should present a report on the impact of the national liability rules for statutory auditors on the audit market structure and should take the steps it considers appropriate as a result of its findings . ### sustainable audit capacity and a competitive market for statutory audit services in which there is a sufficient choice of audit firms capable of carrying out statutory audits of public - interest entities are required in order to ensure a smooth functioning of capital markets . the european competition network should report on the changes brought in the audit market structure by this regulation . when carrying such analysis , the ecn should take into account the impact of the national civil liability rules for statutory auditors on the structure of the audit market . based on such report and other appropriate evidence , the commission should present a report on the impact of the national liability rules for statutory auditors on the audit market structure and should take the steps it considers appropriate as a result of its findings .


### the financial sector is evolving and new categories of financial institutions are created by union law . the importance of new entities and activities outside the regular banking system is growing and their impact on financial stability has become greater . therefore , it is appropriate that the definition of public - interest entity also encompasses other financial institutions and entities such as investment firms , payment institutions , undertakings for collective investments in transferable securities , electronic money institutions and alternative investment funds . ### the financial sector is evolving and new categories of financial institutions have developed in response to regulatory and technological developments . the importance of new entities and activities outside the traditional banking system that were previously unregulated at union level is growing and their impact on financial stability has become greater . therefore , it is appropriate that the definition of public - interest entity also encompasses other financial institutions and entities such as investment firms , payment institutions and electronic money institutions . member states should therefore be able to designate other entities as public - interest entities , for instance entities that are of significant public relevance because of the nature of their business , their size or the number of their employees ;


### provide a statement on the situation of the audited entity or , in case of the statutory audit of consolidated financial statements , of the parent undertaking and the group , especially an assessment of the entity ' s or the parent undertaking ' s and group ' s ability to meet its / their obligation in the foreseeable future and therefore continue as a going concern ; ### provide : a conclusion on the appropriateness of management ' s use of the going concern assumption in the preparation of the financial statements in accordance with the applicable financial reporting framework ; and a statement as to whether , based on the audit , the auditor has identified a material uncertainty related to events or conditions that may cast significant doubt about the entity ' s ability to continue as a going concern that the auditor believes needs to be disclosed in accordance with the applicable financial reporting framework ;


### the audit committee , one or more shareholders , the competent authorities referred to in article 35 or 35 shall be able to bring a claim before a national court for the dismissal of the statutory auditor or audit firm where there are proper grounds . ### the audit committee , one or more shareholders representing at least 5 per cent of the share capital , or the competent authorities referred to in article 35 or 35 shall be able to bring a claim before a national court for the dismissal of the statutory auditor or audit firm where there are proper grounds .


### explain , where additional reports have been reviewed , the scope of such review ; ### report concerning whether the consistency , in all material respects , or otherwise of the management report or consolidated management report with other reports accompanying the annual financial statements or consolidated financial statements , respectively , for the same financial year , and report on whether , based on the audit , the auditor has identified material inconsistencies between the audited financial statements and any other information in a document , if any , containing or accompanying those financial statements , and to clearly identify in the auditor ' s report that other information and include a description of the auditor ' s responsibilities in this regard in accordance with the requirements of the international auditing standards as referred to in article 26 of directive 2006 / 43 / ec .


### indicate and explain in detail all instances of non - compliance , including non - material instances as far as it is considered to be important to the audit committee in order to fulfil its tasks ; ### deleted ;


### if the proposal of the administrative or supervisory board departs from the recommendation of the audit committee , the proposal shall justify the reasons for not following the recommendation of the audit committee . ### if the proposal of the administrative or supervisory board departs from the recommendation of the audit committee , the proposal shall justify the reasons for not following the recommendation of the audit committee . however , the auditor or auditors recommended by the administrative or supervisory board must have participated in the selection procedure described in paragraph 3 .


### give an opinion which shall state clearly the opinion of the statutory auditor or the audit firm as to whether the annual or consolidated financial statements give a true and fair view and have been prepared in accordance with the relevant financial reporting framework and , where appropriate , whether the annual or consolidated financial statements comply with statutory requirements ; the audit opinion shall be either unqualified , qualified , an adverse opinion or , if the statutory auditor or audit firm are unable to express an audit opinion , a disclaimer of opinion . in case of a qualified or an adverse opinion or a disclaimer of opinion , the report shall explain the reasons of such decision ; ### give an opinion which shall state clearly the opinion of the statutory auditor or the audit firm as to whether the annual or consolidated financial statements give a true and fair view of the financial position of the individual entity or consolidated group and of its financial performance and its cash flows in accordance with the relevant financial reporting framework and , comply with statutory accounting requirements ; the audit opinion shall be either unmodified , qualified , an adverse opinion or , if the statutory auditor or audit firm are unable to express an audit opinion , a disclaimer of opinion . in the case of a qualified or an adverse opinion or a disclaimer of opinion , the audit report shall explain the reasons of such decision ;


### when more than one statutory auditor or audit firm have been appointed to carry out the statutory audit of the public - interest entity , they shall agree on the results of the statutory audit and submit a joint report and opinion . in case of disagreement , each statutory auditor or audit firm shall submit his , her or its opinion separately . if one statutory auditor or audit firm qualifies his , her or its opinion , submits an adverse opinion or a disclaimer of opinion , the overall opinion shall be considered as qualified , adverse opinion or a disclaimer of opinion . in a separate paragraph each statutory auditor or audit firm shall state the reasons of disagreement . ### when more than one statutory auditor or audit firm have been appointed to carry out the statutory audit of the public - interest entity , they shall agree on the results of the statutory audit and submit a joint report and opinion .


### it has ratified all the conventions listed in annex viii and the most recent available conclusions of the relevant monitoring bodies do not identify a serious failure to effectively implement any of these conventions ; ### it has ratified all the conventions listed in annex viii without any reservations which are inconsistent with their objectives and purposes and the most recent available conclusions of the relevant monitoring bodies , or any evidence available , do not identify a serious failure to effectively implement any of these conventions ;


### paragraph 1 shall not apply to eba beneficiary countries , nor shall it apply to countries with a share not exceeding 8 % of european union imports of products listed in annex v or ix , whichever is applicable . ### paragraph 1 shall not apply to eba beneficiary countries , nor shall it apply to countries with a share for the relevant products referred to in article 29 not exceeding 6 % of total european union imports of the same products listed in annex v or ix , whichever is applicable .


### if the available financial means of a deposit guarantee scheme are insufficient to repay depositors when deposits become unavailable , its members shall pay extraordinary contributions not exceeding 0 . 5% of their eligible deposits per calendar year . that payment shall be executed one day before the time limit referred to in article 7 . ### if the available financial means of a deposit guarantee scheme are insufficient to repay depositors when deposits become unavailable , then either its members shall pay extraordinary contributions not exceeding 0 . 5% of their covered deposits per calendar year . that payment shall be executed one day before the time limit referred to in article 7 ; or b ) schemes have in place adequate alternative funding arrangements to enable them to obtain further funding to cover their liabilities under the directive . these arrangements may include commercial lending arrangements and lending facilities from public institutions , provided that the terms and conditions for lending offered by those facilities are based on commercial grounds .


### deposits by pension and retirement funds , ### deposits by pension and retirement funds , except those held in personal pension schemes or in occupational pension schemes of an employer which is not a large company ;


### deposit guarantee schemes shall raise the available financial means by regular contributions from their members on 30 june and 30 december of each year . this shall not prevent additional financing from other sources . one - off entry fees may not be requested . ### deposit guarantee schemes shall raise the available financial means by regular contributions from their members at least once each year . this shall not prevent additional financing from other sources . one - off entry fees may not be requested .


### ‘ target level’ means 1 . 5% of eligible deposits for the coverage of which a deposit guarantee scheme is responsible ; ### ‘ target level’ means an amount of no less than 1 . 0% of covered deposits reached over a period of 10 years . member states may decide to implement schemes that are either funded ex - ante or ex - post , subject to an observation period until 2015 to allow member states to reassess the benefits of ex - ante or ex - post schemes in light of basel observation periods . if , following or during the observation period a scheme that has been partly or fully funded ex - post becomes ex - ante the 10 year funding period shall start from the date of conversion to ex - ante ;


### any switch to or from an alternative roaming provider shall be free of charge and shall not entail conditions or restrictions pertaining to elements of the subscription other than roaming , and shall be carried out within five working days , save that where a roaming customer who has subscribed to a domestic package which includes roaming prices other than the eurotariff , euro - sms tariff or euro - data tariff , the home provider may delay the switch from the old to the new subscription concerning roaming services for a specified period not exceeding three months . ### any switch to or from an alternative roaming provider , or between alternative roaming providers , shall be free of charge and shall not entail conditions or restrictions pertaining to elements of the subscription other than roaming , and shall be carried out within the shortest possible time , to be defined in the berec guidelines , save that where a roaming customer who has subscribed to a domestic package which includes roaming prices other than the eurotariff , euro - sms tariff or euro - data tariff , the home provider may delay the switch from the old to the new subscription concerning roaming services for a specified period not exceeding two months .


### any switch to or from an alternative roaming provider shall be free of charge and shall not entail conditions or restrictions pertaining to elements of the subscription other than roaming , and shall be carried out within five working days , save that where a roaming customer who has subscribed to a domestic package which includes roaming prices other than the eurotariff , euro - sms tariff or euro - data tariff , the home provider may delay the switch from the old to the new subscription concerning roaming services for a specified period not exceeding three months . ### any switch to or from an alternative roaming provider , or between alternative roaming providers , shall be free of charge and shall not entail conditions or restrictions pertaining to elements of the subscription other than roaming , and shall be carried out within three working days , save that where a roaming customer who has subscribed to a domestic package which includes roaming prices other than the eurotariff , euro - sms tariff or euro - data tariff , the home provider may delay the switch from the old to the new subscription concerning roaming services for a specified period not exceeding two months .


### the depositary shall be liable to the aifm and the investors of the aif for any losses suffered by them as a result of its failure to perform its obligations pursuant to this directive . ### the depositary shall be liable to the aifm and the investors of the aif for any losses suffered by them as a result of its unjustifiable failure to perform its obligations pursuant to this directive .


### depositaries may delegate their tasks to other depositaries . ### the depositary may delegate to third parties the tasks referred to in this article . the third party may in turn sub - delegate those tasks . the depositary shall exercise all due skill , care and diligence in the selection , appointment and periodic review of any third party as referred to in this paragraph . in the case of loss of financial instruments held by a sub - custodian , the depositary may , on a contractual basis , discharge itself of its liability under paragraph 5 if it can prove that it has fulfilled its obligations pursuant to this directive . the depositary must take the necessary steps to ensure that financial instruments which it holds with a sub - custodian are identifiable separately from financial instruments belonging to the depositary and from financial instruments belonging to that sub - custodian , by means of differently titled accounts on the books of the depositary or sub - custodian or other measures that achieve the same level of protection . financial instruments held by a sub - custodian may be registered in its books in one or more segregated accounts for multiple aif .


### the depositary shall be a credit institution having its registered office in the community and be authorised in accordance with directive 2006 / 48 / ec of the european parliament and council of 14 june 2006 relating to the taking up and pursuit of the business of credit institutions . ### the depositary shall be either : a credit institution having its registered office in the community and authorised in accordance with directive 2006 / 48 / ec of the european parliament and council of 14 june 2006 relating to the taking up and pursuit of the business of credit institutions ; or an investment firm authorised in accordance with directive 2004 / 39 / ec and which provides the ancillary service of safe - keeping and administration of financial instruments for the account of clients in accordance with section b of annex i to that directive , having its registered office in the community ; or a person subject to prudential regulation and ongoing supervision and which can furnish sufficient financial and professional guarantees to be able to effectively perform the relevant depositary functions and meet the commitments inherent in those functions . in addition to the provisions laid down in points , and of the first subparagraph , for aif which exclusively or predominantly hold immovable property and / or transferable securities as defined by point 18 of article 4 of directive 2004 / 39 / ec and whose investment strategy mainly involves holding such immovable property and transferable securities for the medium or long term , the depositary may be a person which carries out depositary functions as part of professional or business activities in respect of which it is subject to mandatory professional registration recognised by law or to legal or regulatory provisions or rules of professional conduct and which can furnish sufficient financial and professional guarantees to be able to effectively perform the relevant depositary functions and meet the commitments inherent in those functions . member states shall determine which of the categories of institutions referred to this paragraph are eligible to be depositaries .


### it is therefore appropriate to extend autonomous trade preferences to pakistan by suspending for a limited period of time all tariffs for certain products of export interest to pakistan . the provision of these trade preferences would not cause any meaningful adverse effects on the domestic market of the union and would not affect negatively least developed members of the world trade organisation . ### given the hardship being suffered by the pakistani people due to the devastating floods it is therefore appropriate to extend exceptional autonomous trade preferences to pakistan by suspending for a limited period of time all tariffs for certain products of export interest to pakistan . the provision of these trade preferences would cause limited adverse effects on the domestic market of the union and would not affect negatively least developed members of the world trade organisation .


### the commission may adopt delegated acts in accordance with article 5 for the purpose of amending the annexes in order to introduce amendments and technical adjustments necessary following amendments to the combined nomenclature codes and to the taric subdivisions . ### the commission shall present by 31 october 2011 a report to the european parliament and the council on the evolution of imports between 1 january and 30 june 2011 of products covered by this regulation . 2 . where the commission concludes , in its report , that the volume of imports of one of the products included in annex i originating from pakistan exceeds the volume of such imports in the corresponding period of 2010 by twenty percentage points , the commission may adopt a delegated act , in accordance with article 9 , to subject the imports of that product to tariff rate quotas for imports of that product in the year 2012 by amending annex ii . 3 . the tariff rate quota provided for under paragraph 2 shall take the form of a duty free quota limited to the level of imports of that product in 2010 increased by 20% . by way of derogation from article 1 , upon the entry into force of the delegated act , imports in excess of that tariff rate quota shall be subject to most - favoured nation or other applicable duties .


### in particular , the european council underlined its firm commitment to grant exclusively to pakistan increased market access to the union through the immediate and time limited reduction of duties on key imports from pakistan . ### in particular , the european council underlined its firm commitment to grant exclusively to pakistan increased market access to the union through the exceptional , immediate and time limited reduction of duties on key imports from pakistan .


### the aim of this regulation is not to change the substantive law of the member states relating to birth , death , name , marriage , registered partnership , parenthood , adoption , residence , citizenship or nationality , real estate , legal status of a company or other undertaking , intellectual property rights or absence of a criminal record . ### the aim of this regulation is not to change the substantive law of the member states relating to birth , death , name , marriage , registered partnership , parenthood , adoption , residence , citizenship or nationality , real estate , legal status of a company or other undertaking , intellectual property rights or absence of a criminal record . this regulation should , however , retain adequate safeguards against fraud and forgery and provide that , in limited circumstances such as in relation to immigration matters , member states will not be precluded from requiring the provision of original documentation .


### recommendations on the future policies in the area of the protection of intellectual property rights , including on how to enhance an effective cooperation between member states . ### observations on the protection of intellectual property rights and potential future policies and strategies , including on how to enhance cooperation with and between member states , drawing on their own experiences .


### the office should offer a forum that brings together public authorities and the private sector , ensuring the collection , analysis and dissemination of relevant objective , comparable and reliable data regarding the value of intellectual property rights and the infringements of those rights , the development of best practices and strategies to protect intellectual property rights , and raising public awareness of the impacts of intellectual property rights infringements . furthermore , the office should fulfil additional tasks , such as to improve the understanding of the value of intellectual property rights , enhance the expertise of persons involved in the enforcement of intellectual property rights by appropriate training measures , increase knowledge on techniques to prevent counterfeiting , and improve cooperation with third countries and international organisations . ### the office should offer a forum that brings together public authorities and the private sector , ensuring the collection , analysis and dissemination of relevant objective , comparable and reliable data regarding the value of intellectual property rights and the infringements of those rights , the development of best practices and strategies to protect intellectual property rights , and raising public awareness of the impacts of intellectual property rights infringements . furthermore , the office should fulfil additional tasks , such as to improve the understanding of the value of intellectual property rights , enhance the expertise of persons involved in the enforcement of intellectual property rights by appropriate training measures , increase knowledge on techniques to prevent infringements of intellectual property rights , and improve cooperation with third countries and international organisations .


### the office should offer a forum that brings together public authorities and the private sector , ensuring the collection , analysis and dissemination of relevant objective , comparable and reliable data regarding the value of intellectual property rights and the infringements of those rights , the development of best practices and strategies to protect intellectual property rights , and raising public awareness of the impacts of intellectual property rights infringements . furthermore , the office should fulfil additional tasks , such as to improve the understanding of the value of intellectual property rights , enhance the expertise of persons involved in the enforcement of intellectual property rights by appropriate training measures , increase knowledge on techniques to prevent counterfeiting , and improve cooperation with third countries and international organisations . ### the office should offer a forum that brings together public authorities and the private sector , ensuring the collection , analysis and dissemination of relevant objective , comparable and reliable data regarding the value of intellectual property rights and the infringements of those rights , the development of best practices and strategies to protect intellectual property rights , and raising public awareness of the impacts of intellectual property rights infringements . furthermore , the office should fulfil additional tasks , such as to improve the understanding of the value of intellectual property rights , enhance the expertise of persons involved in the enforcement of intellectual property rights by appropriate training measures , increase knowledge on techniques to prevent counterfeiting , and improve cooperation with third countries , international organisations and non - governmental organisations specialising in this field .


### in view of the range of tasks assigned to the observatory , a solution is needed to ensure an adequate and sustainable infrastructure for the fulfilment of the tasks of the observatory . ### in view of the range of tasks assigned to the observatory , a solution is needed to ensure an adequate and sustainable infrastructure for the fulfilment of the tasks of the observatory without generating additional costs .


### cover 75 % of the external area of both the front and back surface of the unit packet and any outside packaging ; ### cover 50 % of the external area of both the front and back surface of the unit packet and any outside packaging ;


### the likelihood of diverging regulation is further increased by concerns over tobacco products , including smokeless tobacco products , having a characterising flavour other than tobacco , which may facilitate uptake of tobacco consumption or affect consumption patterns . for example , in many countries , sales of mentholated products gradually increased even as smoking prevalence overall declined . a number of studies indicated that mentholated tobacco products can facilitate inhalation as well as smoking uptake among young people . measures introducing unjustified differences of treatment between flavoured cigarettes should be avoided . ### the likelihood of diverging regulation is further increased by concerns over tobacco products , including smokeless tobacco products , having a non - tobacco dominant flavour other than tobacco or traditional flavours such as menthol , which may facilitate uptake of tobacco consumption or affect consumption patterns . .


### in order to ensure the integrity and the visibility of health warnings and maximise their efficacy , provisions should be made regarding the dimension of the warnings as well as regarding certain aspects of the appearance of the tobacco package , including the opening mechanism . the package and the products may mislead consumers , in particular young people , suggesting that products are less harmful . for instance , this is the case with certain texts or features , such as ‘ low - tar’ , ‘ light’ , ‘ ultra - light’ , ‘ mild’ , ‘ natural’ , ‘ organic’ , ‘ without additives’ , ‘ without flavours’ , ‘ slim’ , names , pictures , and figurative or other signs . likewise , the size and appearance of individual cigarettes can mislead consumers by creating the impression that they are less harmful . a recent study has also shown that smokers of slim cigarettes were more likely to believe that their own brand might be less harmful . this should be addressed . ### in order to ensure the integrity and the visibility of health warnings and maximise their efficacy , provisions should be made regarding the dimension of the warnings as well as regarding certain aspects of the appearance of the tobacco package , including the opening mechanism . the package and the products may mislead consumers , in particular young people , suggesting that products are less harmful . for instance , this is the case with certain texts or features , such as ‘ low - tar’ , ‘ light’ , ‘ ultra - light’ , ‘ mild’ , ‘ natural’ or ‘ organic’ . in case the package creates a misleading impression that the cigarettes are less harmful , health warnings must be adapted accordingly .


### the power to adopt delegated acts referred to in article 2 , article 3 and article 4 shall be conferred on the commission for an indeterminate period of time from . ### the power to adopt delegated acts referred to in article 2 , article 3 and article 4 shall be conferred on the commission for a period of five years from . the commission shall draw up a report in respect of the delegation of power no later than nine months before the end of the five - year period . the delegation of power shall be tacitly extended for periods of an identical duration unless the european parliament or the council opposes such extension no later than three months before the end of each period .