CELEX: 51978PC0168
Language: en
Date: 1978-04-21
Title: 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

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