{"id":"circulars/faq-faq-concerning-the-eu-regulation-no-537-2014","title":"FAQ concerning the EU Regulation No 537/2014 relating to the monitoring of the fee cap of non-audit services","type":"circular","date":"2018-10-09","kind":"faq","html":"

FAQ concerning the EU Regulation No 537/2014 relating to the monitoring of the fee cap of non-audit services is a CSSF FAQ, published 9 October 2018.

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Relevant for: Public Oversight of the Audit Profession.

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Keywords: Public-interest entities.

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Frequently Asked Questions concerning the EU Regulation No 537/2014 (the “EU Audit Regulation”) relating to the monitoring of the fee cap of non-audit services

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FREQUENTLY ASKED QUESTIONS CONCERNING THE EU REGULATION NO 537/2014 (THE “EU AUDIT REGULATION”) RELATING TO THE MONITORING OF THE FEE CAP OF NON-AUDIT SERVICES Version Version validée

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Frequently Asked Questions concerning the EU Regulation No 537/2014 (the “EU Audit Regulation”) relating to the monitoring of the fee cap of non-audit services TABLE OF CONTENTS 1. 2.

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Preliminary remarks Definitions Definition of the fee cap (Article 4(2) of the EU Audit Regulation) Definitions as per European Directives Statutory auditor (Article 2(2) of Directive 2006/43/CE on statutory audits of annual accounts and consolidated accounts (the “EU Audit Directive”)) 4 Question 1: What is the scope of the cap? Question 2: How is the 70% NAS fee cap calculated? Question 3: What is the first financial year for the purpose of calculating the cap? Question 4: Which financial year to consider for the calculation of the cap? Question 5: What is the basis of calculation of statutory audit and NAS fees? Question 6: Are any NAS excluded from the cap by EU Audit Directive or Regulation? Question 7: What should be understood by “national law” under Article 4(2) of the EU Audit Regulation? Question 8: What is the primary source of information to calculate the cap? Question 9: How to handle with NAS required by third country authorities? Question 10: Are fees related to the audit of reporting packages to be included in the denominator for the purpose of calculation of the cap? Question 11: Are fees related to Interim financial statements to be included in the denominator for the purpose of calculation of the cap? Question 12: Are fees related to Audit of financial statements voluntarily carried out in a controlled undertaking (outside the definition of a statutory audit) to be included in the denominator for the purpose of calculation of the cap?

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This FAQ is based on the paper from the CEAOB (CEAOB 2018-018), adopted on 21 September 2018.

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FREQUENTLY ASKED QUESTIONS CONCERNING THE EU REGULATION NO 537/2014 (THE “EU AUDIT REGULATION”) RELATING TO THE MONITORING OF THE FEE CAP OF NON-AUDIT SERVICES

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Frequently Asked Questions concerning the EU Regulation No 537/2014 (the “EU Audit Regulation”) relating to the monitoring of the fee cap of non-audit services

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  1. Preliminary remarks In order to enhance independence and objectivity of the auditor, the EU Audit Regulation has defined under its Article 4(2) a cap for the provision of nonaudit fees. This note, intended for the main categories of stakeholders involved (e.g. audit firms, audit committees, oversight bodies, professional bodies, PIEs…), defines the guidelines adopted by the CEAOB (https://ec.europa.eu/info/ceaob) on that matter and adapted to Luxembourg’s specificities. 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: https://ec.europa.eu/info/law/audit-directive-2006-43ec/implementation/guidance-implementation-andinterpretation-law_en. The present FAQs starts with the definitions from the Audit Regulation and European Directives and is followed by questions and answers.
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The text above is the opening of the document; the PDF carries the whole.

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Document page, PDF. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.

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