CELEX: 51979PC0679
Language: en
Date: 1979-11-28
Title: AMENDED PROPOSAL FOR AN EIGHTS DIRECTIVE FOUNDED ON ARTICLE 54 ( 3 ) ( G ) OF THE EEC TREATY CONCERNING THE APPROVAL OF PERSONS RESPONSIBLE FOR CARRYING STATUTORY AUDITS OF THE ANNUAL ACCOUNTS OF CERTAIN TYPES OF COMPANY

N o C 317/6                              Official Journal of the European Communities                                 18. 12. 79
                                                                  II
                                                         (Preparatory Acts)
                                                   COMMISSION
                 Amended proposal for an Eighth Directive founded on Article 54 (3) (g) of the EEC
                 Treaty concerning the approval of persons responsible for carrying out statutory audits of
                                       the annual accounts of certain types of company (')
                 (submitted by the Commission to the Council, pursuant to the second paragraph of Article
                                           149 of the EEC Treaty on 5 December 1979)
                       ORIGINAL PROPOSAL                                                A M E N D E D PROPOSAL
Proposal for an Eighth Council Directive pursuant to                 Amended proposal for an Eighth Council Directive
Article 54 (3) (g) of the EEC Treaty concerning the                  pursuant to Article 54 (3) (g) of the EEC Treaty
approval of persons responsible for carrying out                     concerning the approval of persons responsible for
statutory audits of the annual accounts of limited                   carrying out statutory audits of the annual accounts of
                       liability companies                                           certain types of company
THE COUNCIL OF THE EUROPEAN                                          THE COUNCIL OF THE EUROPEAN
COMMUNITIES,                                                         COMMUNITIES,
Having regard to the Treaty establishing the                         Unchanged
European Economic Community, and in particular
Article 54 (3) (g) thereof,
Having regard to the proposal from the Commission,                   Having      regard    to      the   proposal  from     the
                                                                     Commission, (')
Having regard to the opinion of the European Par-                    Having regard to the opinion of the European Par-
liament,                                                             liament, (2)
Having regard to the opinion of the Economic and                     Having regard to the opinion of the Economic and
Social Committee,                                                    Social Committee, (3)
Whereas under Council Directive . . . o f . . . (2) for              Whereas under Council Directive 7 8 / 6 6 0 / E E C (*) on
coordination of national legislation regarding the                   the coordination of national legislation on the annual
O OJ N o C 112, 13. 5. 1978, p. 6.
                                                                     (') OJ C 112, 13. 5. 1978, p. 6.
( 2 ) Amended Proposal for a Fourth Directive on the annual
                                                                     (2) OJ C 140, 5. 6. 1979, p. 154.
      accounts of limited liability companies, Supplement 6 / 7 4    O OJ C 171, 9. 7. 1979, p. 30.
      — Bull. EC.                                                    (4) OJ L 222, 14. 8. 1978, p. 11.
 ---pagebreak--- 18.12.79                             Official Journal of the European Communities                            N o C 317/7
                     ORIGINAL PROPOSAL                                                A M E N D E D PROPOSAL
annual accounts of limited liability companies, the             accounts of certain types of company, the annual
annual accounts of the companies referred to in                 accounts of the companies referred to in Article 1 (1)
Article 1 (1) (b) thereof must be audited by one or             thereof must be audited by one or more persons
more persons approved under national law to audit               approved under national law to audit accounts;
acccounts;
Whereas the latter Directive has been supplemented              Unchanged
by Council Directive . . . o f . . . ( ' ) concerning group
accounts;
Whereas under Council Directive . . . o f . . . (2) as
regards structure of societes anonymes and the
powers and obligations of their organs, 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              Whereas this Directive is therefore         an essential
carrying out statutory audits of the accounts of                 corrollary to Directive 7 8 / 6 6 0 / E E C and to the
limited liability companies is entrusted to highly               proposed Fifth and Seventh Directives;
qualified persons, this is not the rule in all
Community countries;
Whereas, this Directive is therefore an essential                Whereas, although in some Member States the task of
corrollary to the proposed Fourth, Fifth and Seventh             carrying out statutory audits of the accounts of
Directives;                                                      companies is entrusted to highly qualified persons,
                                                                 this is not the rule in all Community countries;
Whereas a high level of theoretical and practical                Unchanged
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                    Unchanged
 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;
Whereas Member States should also be authorized to               Unchanged
 lay down transitional provisions for the benefit of
auditors who do not fulfil all the conditions laid
down in this Directive;
 (') Proposal for a Seventh Directive, OJ C 121, 2. 6. 1976.      (') OJ C 14, 17. 8. 1979.
 (2) Proposal for a Fifth Directive, OJ C 131, 13. 12. 1972.      (2) Unchanged."
 ---pagebreak---  No C 317/8                          Official Journal of the European Communities                          18. 12. 79
                     ORIGINAL PROPOSAL                                           AMENDED PROPOSAL
 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 pro-
 fessional association or company if he is not approved
to carry out that activity as an individual;
                                                              Whereas the recognition of the approval given to
                                                              persons coming from other Member States in respect
                                                              of the statutory audit of accounts will be specifically
                                                              regulated within the framework of a directive
                                                              concerning the mutual recognition of qualifications
                                                              for activities carried out in the financial, economic
                                                              and accounting fields;
                                                              Whereas the Member States will be able to approve
                                                              auditors who have obtained qualifications outwith the
                                                              Community which are deemed to be objectively
                                                              equivalent to those required under this Directive and
                                                              who have passed the test of necessary legal
                                                              knowledge;
Whereas the independence of approved auditors must            Unchanged
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 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                                                   Article 1
The coordination measures prescribed in this                  Unchanged
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 aan-
    sprakelijkheid;
— In Denmark:                                                 — In Denmark:
    Aktieselskab,    kommandit-aktieselskab,    anparts-         Aktieselskaber, kommanditaktieselskaber, anparts-
    selskab;                                                     selskaber;
— In the Federal Republic of Germany:                        Unchanged
    die Aktiengesellschaft, die Kommanditgesellschaft
    auf Aktien, die Gesellschaft mit beschrankter
    Haftung.
 ---pagebreak--- 18. 12. 79                         Official Journal of the European Communities                           N o C 317/9
                    ORIGINAL PROPOSAL                                            A M E N D E D PROPOSAL
— In France:
    La societe anonyme, la societe en commandite par
    actions, la societe a responsabilite limitee;,
— In Ireland:                                                    In Ireland:
    Companies incorporated with limited liability;               Public companies limited by shares or by
                                                                 guarantee, private companies limited by shares or
                                                                 by guarantee;
— In Italy:                                                   Unchanged
    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 :                                           In the Netherlands:
    De     naamloze      vennootschap,      de     besloten      De     naamloze        vennootschap,   de    besloten
    vennootschap met beperkte aansprakelijkheid, de              vennootschap met beperkte aansprakelijkheid;
    commanditaire vennootschap op aandelen;
— In the United Kingdom:                                      — In the United Kingdom:
    Companies incorporated with limited liability.               Public companies limited by shares or by
                                                                 guarantee, private companies limited by shares or
                                                                 by guarantee.
                         Article 2                                                      Article 2
Member States shall approve to carry out statutory            Unchanged
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 do 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
        associations.
                                                1
        The law shall, in particular, ensure:
        — that the abovementioned persons may not                        that the abovementioned persons may not
            participate in the appointment or removal                    intervene in the choice of natural persons
            of auditors and that they may not issue to                   acting as auditors on behalf of the
            the latter any instruction regarding the                     company or association and that they may
            carrying out of audits;                                      not issue to the latter any instruction
                                                                         regarding the carrying out of audits;
 ---pagebreak---  N o C 317/10                              Official Journal of the E u r o p e a n Communities                             18. 12. 79
                       ORIGINAL PROPOSAL                                                     A M E N D E D -PROPOSAL
          — that such persons shall not hold a majority                            that such persons d o not hold a majority of
              of the capital of such professional                                  the capital or voting rights of such p r o -
              companies or associations constituted after                          fessional companies or associations;
              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;
          — that the confidentiality of audit reports                          — that the confidentiality of audit reports and
              produced       by     the   auditors   and   all                      all documents relating thereto is protected.
              documents relating thereto is protected and
              that these are witheld f r o m the knowledge
              of the abovementioned persons.
     (b) T h e natural persons w h o are responsible f o r          Unchanged
          the audit and certification of annual accounts
          carried out under the auspices of the pro-
          fessional company or association in the
          M e m b e r State in which approval is sought,
          shall satisfy at least the conditions specified in
          the following Articles.
                             Article 3                                                              Article 3
T h e M e m b e r States shall grant approval only to              M e m b e r States shall grant approval only to persons
persons w h o are of good repute and independent.                  w h o are of g o o d repute and not carrying on any
                                                                   activity of such nature as to cast d o u b t on their
                                                                   independence.
                             Article 4                                                              Article 4
 1.     A natural person may be approved to carry out               1.      A natural person may be approved to carry out
the activities referred to in Article 1 only after having          the activities referred to in Article 1 only after having
attained university entrance level, followed a course              attained university entrance level, followed a
of advanced training and passed an examination of                  p r o g r a m m e of professional education and training
professional competence at graduate or an equivalent               and         passed     an      examination        of professional
level of training which is organized or recognized by              competence at graduate level which is organized or
the State.                                                         recognized by the State.
2.      Such examination, the general content of which             Unchanged
is set out in Article 5, shall guarantee in the most
appropriate manner a g o o d level of theoretical
knowledge of subjects relevant to the auditing of
accounts and the ability to apply such knowledge in
practice.
                            Article 5                                                               Article 5
1.     T h e test of theoretical knowledge shall cover in          1.       T h e test of theoretical knowledge included in
particular the following subjects:                                 the examination shall cover in particular the following
                                                                   subjects:
 ---pagebreak---                                                                                           \
18. 12. 79                         Official Journal of the E u r o p e a n Communities                           N o C 317/11
                     ORIGINAL PROPOSAL                                                  , A M E N D E D PROPOSAL
— auditing,                                                       Unchanged
— evaluation and critical appraisal of balance sheet
    and profit and loss accounts,
— general accounting,
— problems relating to group accounts,
— cost and m a n a g e m e n t accounting,
— internal audits,                                                 — internal control,
— principles of evaluating balance sheets items and                — accounting standards and method of evaluating
    of determining results,                                              balance sheet items and of determining results,
— c o m p a n y tax law,                                           Unchanged
— c o m p a n y criminal law,
— c o m p a n y law,
In so far as they are relevant to auditing:
— principles of law (civil, commercial and social
    law),
— information system and computer science,                         — information and computer systems,
— business, general and financial m a n a g e m e n t of           Unchanged
    business undertakings,
— mathematics and statistics,
— basic principles of financial            management   of
    business undertakings.
2.    By w a y of derogation f r o m paragraph 1, holders          Unchanged
of a university degree or equivalent qualification in
one or m o r e of the subjects referred to in paragraph 1
may be exempted f r o m the test of theoretical
knowledge in the subjects covered by such degree or
qualification.
3.    T h e test of practical knowledge referred to in             3.      T h e test included in the examination of ability
Article 4 shall take place after a minimum of three                to apply the theoretical knowledge in practice shall
years' practical training with an auditor approved                 take place after a minimum of three years' practical
pursuant to this Directive and involving principally               training with an auditor approved pursuant to this
the statutory audit of the annual accounts of                      Directive and involving principally the statutory audit
companies.                                                         of the annual accounts of companies.
4.    By way of derogation f r o m paragraph 3, part of            4.      By w a y of derogation f r o m paragraph 3, such
such practical training may take place after the exami-            practical training may take place after the test of
nation of professional competence has been passed,                 theoretical knowledge referred to in paragraph 1.
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                                                               Article 6
 1.   M e m b e r States may authorize persons to sit the           Unchanged
examination of professional competence provided for
 ---pagebreak--- N o C 317/12                               Official Journal of the E u r o p e a n Communities                           18. 12. 79
                        ORIGINAL PROPOSAL                                                  A M E N D E D PROPOSAL
in Article 4, notwithstanding the fact that they
have not attained the level of study required u n d e r
Article 4 if they can show:
(a) that they have for fifteen 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                 (b) that they have for seven years engaged in such
       activities and have also u n d e r g o n e the supervised          activities and have also u n d e r g o n e the practical
       practical training referred to in Article 5 (3) or                 training referred to in Article 5 (3) or (4) and are
       (4) and are at least 25 years of age.                              at least 25 years of age.
2.       M e m b e r States may deduct periods of pro-             Unchanged
fessional training in the subjects referred to in Article
 5 ( 1 ) f r o m the years of activity referred to in (a) and
 (b) above.
                             Article 7                                                            Article 7
W i t h o u t prejudice to Articles 3, 9 and 11:                    W i t h o u t prejudice to Articles 3 and 9:
1. M e m b e r States may, if they have not previously              1. M e m b e r States may, if they have not previously
     d o n e so, approve persons w h o d o not fulfil all the            d o n e so, approve persons w h o d o not fulfil all the
     conditions laid d o w n in this Directive but w h o ,               conditions laid d o w n in this Directive but w h o ,
     until the date of entry into force of the provisions                until the date of entry into force of the provisions
     specified in Article 13 (1), had the right to carry                 specified in Article 13 (1), had the right to carry
     out statutory audits of the annual accounts of                      out statutory audits of the annual accounts of
     companies, even if they did not in fact engage in                   companies and had in fact engaged in such
     such activity.                                                      activity.
2. M e m b e r States may adopt transitional measures in            2. M e m b e r States may adopt transitional measures in
     respect of persons w h o , after the date specified                 respect of persons w h o , after the date specified
     u n d e r point 1, retain the right to audit the                    u n d e r point 1, audit the accounts of certain types
     accounts of certain types of c o m p a n y not subject              of c o m p a n y not subject to statutory audits, but
     to statutory audits, but w h o will be deprived of                  w h o will no longer be able to carry out such audits
     that right by the introduction of new statutory                     u p o n the introduction of new statutory audits
     audits unless special measures are enacted for their                unless special measures are enacted for their
     benefit.                                                            benefit.
                             Article 8                                                            Article 8
1.      M e m b e r States may adopt transitional measures          Unchanged
in respect of students already undergoing professional
training w h e n this Directive enters into force, w h o ,
on completion of their studies, would not fulfil the
conditions laid d o w n herein and w h o would therefore
be unable to carry out the statutory audit of c o m p a n y
accounts for which they had been trained.
2.       Articles 3, 9 and 11 shall apply where approval           2.       Articles 3 and 9 shall apply w h e r e approval is
is granted to the persons referred to in paragraph 1.              granted to the persons referred to in paragraph 1.
 ---pagebreak--- 18. 12. 79                        Official Journal of the European Communities                           N o C 317/13
                    ORIGINAL PROPOSAL                                             A M E N D E D PROPOSAL
                         Article 9                                                       Article 9
N o person may be approved under Articles 7 or 8 by           Unchanged
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                                                     Article 10
1.    A Member State, where necessary by way of               Unchanged
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                (a) they have obtained, elsewhere than in a Member
     Member State, qualifications which are deemed                 State, qualifications which are deemed by the
     by the competent authorities to be objectively               competent authorities to be objectively equivalent
     equivalent to those required under this Directive.           to those 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.             2.    In this case Article 3 shall apply.
                         Article 11                                                      Article 11
1.    An approved person whose independence does              Unchanged
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,                 2.    An auditor of a company's accounts or the pro-
neither directly nor through another person, receive          fessional company or association to which he belongs
benefits from that company or from the persons                may, neither directly nor through another person,
specified in paragraph 1 and may not have an interest         receive loans from that company or from the persons
in the capital of that company.                               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          Unchanged
 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
cirumstances, this situation is not such as to limit his
 independence.
 4.    Member States shall ensure that approved               Unchanged
persons fulfil their obligations either through appro-
 ---pagebreak--- N o C 317/14                             Official Journal of the E u r o p e a n Communities                        18. 12. 79
                       ORIGINAL PROPOSAL            '                                      A M E N D E D PROPOSAL
priate administrative measures or by making such
persons      subject to        professional discipline.    In
particular, approved persons shall, as a minimum, be
liable to disciplinary sanctions if they fail to carry out
their duties as auditors with all due professional care
and complete moral and financial independence.
                            Article 12                                                           Article 12
 1.    M e m b e r States shall publish a list of all natural     1.       M e m b e r States shall ensure the publication of
persons      and     all    professional   companies     and      lists of all natural persons and all professional
associations approved by them to carry out statutory              companies and associations approved by them to
audits of the annual accounts of the companies                    carry out statutory audits of the annual accounts of
referred to in Article 1.                                         the companies referred to in Article 1.
2.        Such lists shall contain, beside the names of           Unchanged
the legal persons and professional companies and
associations approved, the names of the natural
persons referred to in Article 2 (2) (b).
3.    This list shall be brought up to date regularly             3.           Such lists shall be b r o u g h t up to date
and published annually, but any interested party may              regularly and published annually, but any interested
at any time consult the competent authority in order              party may at any time consult the competent
to examine the exact list of approved persons.                    authorities in order to examine the exact lists of
                                                                  approved persons.
                           Article 13                                                            Article 13
1.    M e m b e r States shall bring into force the laws,         1.      M e m b e r States shall bring into force the laws,
regulations or administrative provisions needed in               regulations or administrative provisions necessary to
order to comply with this Directive within eighteen              comply with this Directive within t w o years of its
months of its notification. T h e y shall forthwith              notification. T h e y shall forthwith inform the
inform the Commission thereof.                                   Commission thereof.
2.    M e m b e r States may provide that the provisions          2.       M e m b e r States may provide that the provisions
referred to in paragraph 1 shall not apply to the                 referred to in paragraph 1 shall not apply f o r a period
parties concerned for a period of two years at the                of three years f r o m the end of the period laid d o w n
most f r o m the date of their entry into force.                  in the said paragraph.
3.    Member         States     shall  ensure    that   they     Unchanged
communicate to the Commission the text of the main
provisions of national law which they adopt in the
field covered by this Directive.
4.    M e m b e r States shall also ensure that they             4.       M e m b e r States shall also ensure that they
communicate to the Commission a list of the exami-               communicate to the Commission a list of the exami-
nations which they recognize, pursuant to Article 4              nations recognized pursuant to Article 4 (1).
(1), as providing guarantees which are at least equal
to those provided by the examination organized by
the State.
 ---pagebreak--- 18. 12. 79                      Official Journal of the E u r o p e a n Communities                         N o C 317/15
                   ORIGINAL PROPOSAL                                                A M E N D E D PROPOSAL
                                                                                          Article 13a
                                                                T h e contact committee set up pursuant to Article 52
                                                                of Directive 7 8 / 6 6 0 / E E C shall also have as its
                                                                function:
                                                                (a) to facilitate, without prejudice to the provisions
                                                                       of Articles 169 and           170 of the T r e a t y ,
                                                                       harmonized application of this Directive t h r o u g h
                                                                       regular meetings dealing in particular with
                                                                      practical problems arising in connection with its
                                                                       application;
                                                                (b) to advise the Commission, if necessary,               on
                                                                      additions or amendments to this Directive.
                       Article 14                                                          Article 14
This Directive is addressed to the M e m b e r States.         Unchanged