New EU rules, finalized 16 June 2014, place significant restrictions on Auditors of public interest companies domiciled in the EU, which can include subsidiaries of non-EU companies. Public interest companies generally include listed companies, credit institutions and insurance companies. Each EU Member State has the option to expand the types of companies included.
Under the rules, the auditor of a public interest company is not allowed to provide certain other non-audit services to the company, such as preparing tax forms, calculating payroll taxes, and providing support during examinations by tax authorities unless such support is required by law. Each EU Member State has the option to prohibit additional services or permit certain services.
The rules require that public interest companies change their statutory auditory every 10 years. Each EU Member State has the option to shorten the rotation period, or allow extensions of up to 10 years, or 14 years in the case of a joint audit. Specific rules apply on the timing of the first rotation following the implementation of the rules based on the number of years a company's auditor has been engaged.
The new rules will be translated into the laws of the respective EU Member States, and will generally apply from 17 June 2016.