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Expansion / These include those financial institutions, insurance companies, listed (regardless of whether they are in the Ibex, in Continuous or MAB), pension funds or collective investment entities.
These committees will be supervised by the Securities and Exchange Commission, which will ensure that they are operating, including examining potential threats to the independence of the audit or review the financial reporting process. With this law, supervising Gowex, which traded at MAB, had been controlled by the CNMV.
The bill also provides for rotation of audit firms every ten years. Once that period expires, if a public contest is held, the auditor may follow four years, provided between a new and a joint audit is conducted. The text thus opens the possibility of joint audit of two firms, which until now has not happened in Spain and is usual in other European countries like France.
The text, which adapts to the Spanish legislation directive and regulation approved in Brussels last spring, will happen now to the State Council for approval into law by the Executive and subsequently initiate parliamentary procedure.
The draft leaves the Council Ministers also limits the fees that audit firms receive from EIP in two ways. On the one hand, in the case of services other than audit, compensation may not exceed, for three or more consecutive years, 70% of the average fees for audit services received during the last three years.
On the other hand, for reasons of concentration and to avoid financial dependence on one entity, the fees may not exceed firms in the last three years 15% of earned income.
The text also prohibits auditors to provide certain services such as accounting, internal audit, law or design of internal control procedures and risk management related to financial reporting. Also incompatible tax and valuation services, unless they have no direct effect on the audited statements
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