No C 112/6 Official Journal of the European Communities 13. 5. 78 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for an eighth Directive pursuant to Article 54 (3) (g) of the EEC Treaty 
concerning the approval of persons responsible for carrying out statutory audits of the 
annual accounts of limited liability companies 
(Submitted by the Commission to the Council on 24 April 1978) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the 
European Economic Community, and in particular 
Article 54 (3) (g) thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas, under Council Directive ... of ... on 
coordination of national legislation regarding the 
annual accounts of limited liability companies (1), the 
annual accounts of the companies referred to in 
Article 1 (1) (b) thereof must be audited by one or 
more persons approved under national law to audit 
accounts; 
Whereas the latter Directive has been supplemented 
by Council Directive ... of ... concerning group 
accounts (2); 
Whereas, under Council Directive ... of ... as 
regards structure of 'societes anonymes' and the 
(*) Amended proposal for a fourth Directive on the 
annual accounts of limited liability companies (Sup­
plement 6/74 to the bulletin of the European Com­
munities). 
(') Proposal for a seventh Directive (OJ No C 121, 
2. 6. 1976). powers and obligations of their organs (3), only 
persons who are independent and who are nominated 
or approved by a judicial or administrative authority 
may be charged with the responsibility of auditing 
the accounts of public limited liability companies; 
Whereas, although in some Member States the task 
of carrying out statutory audits of the accounts of 
limited liability companies is entrusted to highly 
qualified persons, this is not the rule in all 
Community countries; 
Whereas this Directive is therefore an essential 
corrollary to the proposed fourth, fifth and seventh 
Directives; 
Whereas a high level of theoretical and practical 
knowledge must be required to carry out statutory 
audits of the accounts of limited liability companies 
and whereas the Member States will be able to 
approve only those persons who pass an examination 
of professional competence at graduate level; 
Whereas Member States should be authorized to 
provide an opportunity for social advancement for 
those persons who, without being able to give proof 
of theoretical training, have long and sound practical 
experience in the field of law, finance and 
accountancy; 
(8) Proposal for a fifth Directive (OJ No C 131, 
13. 12. 1972). 
13. 5. 78 Official Journal of the European Communities No C 112/7 
Whereas Member States should also be authorized to 
lay down transitional provisions for the benefit of 
auditors who do not fulfil all the conditions laid 
down in this Directive; 
Whereas the Member States will be empowered to 
approve both natural persons and professional 
associations or companies if they ensure, in 
particular, that a person should not be entrusted with 
carrying out statutory audits as a member or such a 
professional association or company if he is not 
approved to carry out that activity as an individual; 
Whereas the independence of approved auditors must 
be assured in a general manner so as to supplement 
the more specific provisions laid down in the 
proposal for a fifth Directive; 
Whereas members of various professions who fulfil 
the conditions laid down in the Directive will be able 
to seek approval from the Member State in which 
they wish to carry out the activity of auditing the 
accounts of limited liability companies, 
HAS ADOPTED THIS DIRECTIVE: 
Article 1 
The coordination measures prescribed in this 
Directive shall apply to provisions laid down by laws, 
regulations or administrative provisions of the 
Member States concerning the approval of persons 
responsible for carrying out statutory audits of the 
annual accounts of the following companies: 
— in Belgium: 
la societe anonyme, de naamloze vennootschap, la 
societe en commandite par actions, de 
commanditaire vennootschap op aandelen, la 
societe de personnes a responsabilite limitee, de 
personen vennootschap met beperkte aansprake-
lijkheid; 
— in Denmark: 
Aktieselskab, Kommandit-Aktieselskab, Anparts-
selskab; 
— in the Federal Republic of Germany: 
die Aktiengesellschaft, die Kommanditgesellschaft 
auf Aktien, die Gesellschaft mit beschrankter 
Haftung; 
— in France: 
la societe anonyme, la societe en commandite par 
actions, la societe a responsabilite limitee; 
— in Ireland: 
companies incorporated with limited liability; — in Italy: 
la societa per azioni, la societa in accomandita 
per azioni, la societa a responsabilita limitata; 
— in Luxembourg: 
la societe anonyme, la societe en commandite par 
actions, la societe a responsabilite limitee; 
— in the Netherlands: 
de naamloze vennootschap, de besloten 
vennootschap met beperkte aansprakelijkheid, de 
commanditave vennootschap op aandelen; 
— in the United Kingdom: 
companies incorporated with limited liability. 
Article 2 
Member States shall approve to carry out statutory 
audits of the annual accounts of the companies 
referred to in Article 1 only: 
1. natural persons who satisfy at least the conditions 
specified in the following Articles; 
2. legal persons or other types of professional 
companies or associations which satisfy the 
following conditions: 
(a) The partners, members, persons responsible 
for the management, administration, direction 
or supervision of such professional companies 
or associations who no not personally fulfil 
the conditions laid down in this Directive shall 
exercise no influence over the statutory audits 
carried out under the auspices of such 
approved professional companies or associ­
ations. 
The law shall, in particular, ensure: 
— that the abovementioned persons may not 
participate in the appointment or removal 
of auditors and that they may not issue to 
the latter any instruction regarding the 
carrying out of audits; 
— that such persons shall not hold a majority 
of the capital of such professional 
companies or associations constituted after 
the entry into force of measures 
implementing this Directive and that they 
may not thereafter increase their holding 
so as to obtain a majority of the capital of 
existing professional companies or 
associations; 
No C 112/8 Official Journal of the European Communities 13.5.78 
— that the confidentiality of audit reports 
produced by the auditors and all 
documents relating thereto is protected 
and that these are withheld from the 
knowledge of the abovementioned 
persons. 
(b) The natural persons who are responsible for 
the audit and certification of annual accounts 
carried out under the auspices of the 
professional company or association in the 
Member State in which approval is sought, 
shall satisfy at least the conditions specified in 
the following Articles. 
Article 3 
The Member States shall grant approval only to 
persons who are of good repute and independent. 
Article 4 
1. A natural person may be approved to carry out 
the activities referred to in Article 1 only after having 
attained university entrance level, followed a course 
of advanced training and passed an examination of 
professional competence at graduate or an equivalent 
level of training which is organized or recognized by 
the State. 
2. Such examination, the general content of which 
is set out in Article 5, shall guarantee in the most 
appropriate manner a good level of theoretical 
knowledge of subjects relevant to the auditing of 
accounts and the ability to apply such knowledge in 
practice. 
Article 5 
1. The test of theoretical knowledge shall cover in 
particular the following subjects: 
— auditing, 
— evaluation and critical appraisal of balance sheets 
and profit and loss accounts, 
— general accounting, 
— problems relating to group accounts, 
— cost and management accounting, 
— internal audits, 
— principles of evaluating balance sheet items and of 
determining results, 
— company tax law, 
— company criminal law, 
— company law. In so far as they are relevant to auditing: 
— principles of law (civil, commercial and social 
law), 
— information systems and computer science, 
— business, general and financial economics, 
— mathematics and statistics, 
— basic principles of financial management of 
business undertakings. 
2. By way of derogation from paragraph 1, holders 
of a university degree or equivalent qualification in 
one or more of the subjects referred to in paragraph 
1 may be exempted from the test of theoretical 
knowledge in the subjects covered by such degree or 
qualification. 
3. The test of practical knowledge referred to in 
Article 4 shall take place after a minimum of three 
years' practical training with an auditor approved 
pursuant to this Directive and involving principally 
the statutory audit of the annual accounts of 
companies. 
4. By way of derogation from paragraph 3, part of 
such practical training may take place after the 
examination of professional competence has been 
passed, but in such case the competent authorities 
shall certify before granting approval that the 
candidate has the practical ability necessary to carry 
out his duties. 
Article 6 
1. Member States may authorize persons to sit the 
examination of professional competence provided for 
in Article 4, notwithstanding the fact that they have 
not attained the level of study required under Article 
4 if they can show: 
(a) that they have for 15 years engaged in activities 
enabling them to acquire sufficient experience in 
the field of finance, law and accountancy; or 
(b) that they have for seven years engaged in such 
activities and have also undergone the supervised 
practical training referred to in Article 5 (3) or 
(4) and are at least 25 years of age. 
2. Member States may deduct periods of 
professional training in the subjects referred to in 
Article 5 (1) from the years of activity referred to in 
(a) and (b) above. 
13. 5. 78 Official Journal of the European Communities No C 112/9 
Article 7 
Without prejudice to Articles 3, 9 and 11: 
1. Member States may, if they have not previously 
done so, approve persons who do not fulfil all the 
conditions laid down in this Directive but who, 
until the date of entry into force of the provisions 
specified in Article 13 (1), had the right to carry 
out statutory audits of the annual accounts of 
companies, even if they did not in fact engage in 
such activity. 
2. Member States my adopt transitional measures in 
respect of persons who, after the date specified 
under paragraph 1, retain the right to audit the 
accounts of certain types of company not subject 
to statutory audits, but who will be deprived of 
that right by the introduction of new statutory 
audits unless special measures are enacted for 
their benefit. 
Article 8 
1. Member States may adopt transitional 
measures in respect of students already undergoing 
professional training when this Directive enters into 
force, who, on completion of their studies, would not 
fulfil the conditions laid down herein and who would 
therefore be unable to carry out the statutory audit of 
company accounts for which they had been trained. 
2. Articles 3, 9 and 11 shall apply where approval 
is granted to the persons referred to in paragraph 1. 
Article 9 
No person may be approved under Article 7 or 8 by 
way of derogation from Article 4 unless he is judged 
by the competent authorities fit to carry out his 
duties on the ground that he affords the same 
guarantees as persons approved under Article 4. 
Article 10 
1. A Member State, where necessary by way of 
derogation from Article 4, may approve to carry out 
the statutory audits referred to in Article 1 persons 
who fulfil the following two conditions: 
(a) they have obtained, elsewhere than in that 
Member State, qualifications which are deemed 
by the competent authorities to be objectively 
equivalent to fhose required under this Directive. Qualifications obtained in another Member State 
are however always to be considered equivalent 
if approval has already been granted in this latter 
State according to the provisions of this 
Directive; 
(b) they have proved that they have sufficient legal 
knowledge to carry out statutory audits in the 
Member State in which approval is sought. 
2. In this case Articles 3 and 11 shall apply. 
Article 11 
1. An approved person whose independence does 
not appear to be sufficiently guaranteed in relation to 
the persons who are members of the body which 
represents, administers, directs or supervises a 
company, or its majority shareholders or members, 
shall not audit the accounts of that company. 
2. An auditor of a company's accounts may, 
neither directly nor through another persons, receive 
benefits from that company or from the persons 
specified in paragraph 1 and may not have an interest 
in the capital of that company. 
3. A person may only audit the annual accounts of 
a company or group of companies where more than 
10 % of his turnover is derived from that client if the 
disciplinary authorities consider that, in view of the 
circumstances, this situation is not such as to limit his 
independence. 
4. Member States shall ensure that approved 
persons fulfil their obligations either through 
appropriate administrative measures or by making 
such persons subject to professional discipline. In 
particular, approved persons shall, as a minimum, be 
liable to disciplinary sanctions of they fail to carry 
out their duties as auditors with all due professional 
care and complete moral and financial independence. 
Article 12 
1. Member States shall publish a list of all natural 
persons and all professional companies and 
associations approved by them to carry out statutory 
audits of the annual accounts of the companies 
referred to in Article 1. 
2. Such list shall contain, beside the names of the 
legal persons and professional companies and 
associations approved, the names of the natural 
persons referred to in Article 2 (2) (b). 
No C 112/10 Official Journal of the European Communities 13. 5. 78 
3. This list shall be brought up-to-date regularly 
and published annually, but any interested party may 
at any time consult the competent authority in order 
to examine the exact list of approved persons. 3. Member States shall ensure that they 
communicate to the Commission the text of the main 
provisions of national law which they adopt in the 
field covered by this Directive. 
Article 13 
1. Member States shall bring into force the laws, 
regulations or administrative provisions needed in 
order to comply with this Directive within 18 months 
of its notification. They shall forthwith inform the 
Commission thereof. 4. Member States shall also ensure that they 
communicate to the Commission a list of the 
examinations which they recognize, pursuant to 
Article 4 (1), as providing guarantees which are at 
least equal to those provided by the examination 
organized by the State. 
2. Member States may provide that the provisions 
referred to in paragraph 1 shall not apply to the 
parties concerned for a period of two years at the 
most from the date of their entry into force. Article 14 
This Directive is addressed to the Member States.