{"id":"circulars/faq-faq-concerning-the-eu-regulation-no-537-2014-relating-to-the-duration-of-the-aud","title":"FAQ concerning the EU Regulation No 537/2014 relating to the duration of the audit engagement","type":"circular","date":"2019-12-09","kind":"faq","html":"<p>FAQ concerning the EU Regulation No 537/2014 relating to the duration of the audit engagement is a CSSF FAQ, published 9 December 2019.</p>\n<p>Relevant for: Public Oversight of the Audit Profession.</p>\n<p>Keywords: Approved statutory auditor (réviseur d'entreprises agréé), Public-interest entities.</p>\n<h2>Text</h2>\n<p>Frequently Asked Questions concerning the EU Regulation No 537/2014 (the “EU Audit Regulation”) relating to the duration of the audit engagement</p>\n<p>VERSION 2 7 OCTOBER 2020</p>\n<p>FREQUENTLY ASKED QUESTIONS CONCERNING THE EU REGULATION NO 537/2014 (THE “EU AUDIT REGULATION”) RELATING TO THE DURATION OF THE AUDIT ENGAGEMENT</p>\n<p>Version 7 October 2020</p>\n<p>Frequently Asked Questions concerning the EU Regulation No 537/2014 (the “EU Audit Regulation”) relating to the duration of the audit engagement This FAQ is based on the CEAOB guidelines (CEAOB 2019-041) adopted on 28 November 2019.</p>\n<p>TABLE OF CONTENTS 1. 2.</p>\n<p>Preliminary remarks 3 Definitions 3 Article 17 of the Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities (hereinafter, Regulation) 3 Article 41. Transitional provisions. 5 Question 1: How to calculate the duration of the audit engagement? How has the network of the auditor or audit firm to be considered in the duration of the audit engagement? 7 Question 2: How is the minimum duration of the engagement applied? 7 Question 3: How is the duration of the audit engagement implemented in the case of a group audit? 8 Question 4: Which are the conditions for the extension of the maximum duration of 10 years? 8 Question 5: When does an entity become a PIE? 9 Question 6: What are the conditions for the rotation of the key audit partner? Can key audit partners after their cessation become engagement quality control reviewers for the same audit engagement? Are the engagement quality control reviewers required to rotate? 9 Question 6 bis: In the case of a group audit and for the purpose of the application of key audit partners’ rotation requirement, how shall material subsidiaries be determined? 10 Question 7: Who are the persons within the audit firm that need to rotate on a gradual basis? 11 Question 8: How do the mergers and acquisitions affect the calculation of the maximum duration of the audit engagement? 11 Question 9: How do the transitional provisions of Article 41 of the Regulation apply? 12</p>\n<p>FREQUENTLY ASKED QUESTIONS CONCERNING THE EU REGULATION NO 537/2014 (THE “EU AUDIT REGULATION”) RELATING TO THE DURATION OF THE AUDIT ENGAGEMENT</p>\n<p>Version 7 October 2020</p>\n<p>Frequently Asked Questions concerning the EU Regulation No 537/2014 (the “EU Audit Regulation”) relating to the duration of the audit engagement 1.</p>\n<p>Preliminary remarks Articles 17 and 41 of the Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 contain specific requirements regarding statutory audit of public-interest entities (hereinafter, Regulation) aimed at addressing the familiarity threat and reinforcing the independence of statutory auditors and audit firms. This document is intended for auditors and audit firms, audit committees, oversight bodies, professional bodies, public interest entities (PIEs) and other stakeholders and includes the guidelines adopted by the CEAOB (<a href=\"https://ec.europa.eu/info/ceaob\" target=\"_blank\" rel=\"noreferrer\">https://ec.europa.eu/info/ceaob</a>) on the matter of duration of the audit engagement. When applying the guidelines, it is important to give due consideration to the underlying intention and spirit of Articles 17 and 41 of the Regulation to address the familiarity threat and reinforce independence and to ensure that the provisions are applied in a non-abusive way. The present FAQs are to be read in conjunction with the questions and answers published by the European Commission. These questions and answers are available on the following website: <a href=\"https://ec.europa.eu/info/law/audit-directive-2006-43ec/implementation/guidance-implementation-and-interpretation-law_en\" target=\"_blank\" rel=\"noreferrer\">https://ec.europa.eu/info/law/audit-directive-2006-43ec/implementation/guidance-implementation-and-interpretation-law_en</a>.</p>\n<p>Definitions Article 17 of the Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities (hereinafter, Regulation) “1.</p>\n<p>The text above is the opening of the document; the PDF carries the whole.</p>\n<p><a href=\"https://www.cssf.lu/en/Document/faq-concerning-the-eu-regulation-no-537-2014-relating-to-the-duration-of-the-audit-engagement/\" target=\"_blank\" rel=\"noreferrer\">Document page</a>, <a href=\"https://www.cssf.lu/wp-content/uploads/FAQ_on_duration_of_audit_engagements.pdf\" target=\"_blank\" rel=\"noreferrer\">PDF</a>. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.</p>"}