What are the main measures introduced by the EAR?

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The primary measures introduced by the EAR

The EAR introduces some noteworthy changes in the European audit market, that have an effect on businesses all over Europe, particularly Public Interest Entities (PIEs). One of the most important changes is the mandatory rotation requirement for auditors of PIEs. We invite you to learn more about these changes and assess how they affect your organization.

A European definition for Public Interest Entities (PIEs)

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The primary changes affecting PIEs and their auditors

The reform brings about important changes for PIEs operating in the European Union. In order to help you understand these changes, we are providing you with a summary of the key measures introduced by the EAR. 

Further insights

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What you need to know about joint audit

The recognition given to joint audit within the new regulation reinforces the idea that the system is a proven and valued option. As an expert on joint audit, we invite you to learn more about its concept, its methods and its associated benefits.

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Introducing mandatory rotation and encouraging joint audit

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The EAR both introduces mandatory rotation requirements for the Statutory Auditor of PIEs and promotes the practice of joint audit.

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Safeguarding the independence of auditors by limiting non-audit services

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The EAR introduces a list of prohibited non-audit services and institutes a threshold for permitted non-audit services.

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Reinforcing the role of the audit committees

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The EAR formalizes long-held best practices by expanding the responsibilities of audit committee members of PIEs.

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Encouraging transparent appointment procedures of statutory auditors or audit firms

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The EAR specifies a more prescriptive tendering process for PIEs when appointing statutory auditors.

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Promoting accountability and transparency through additional reporting

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The EAR seeks to reinforce confidence in the audit process by introducing enhanced reporting requirements for audit reports.

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Fostering a secure market by creating a European Oversight System

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The EAR requires each Member State to designate a single Competent Authority to bear ultimate responsibility for the audit oversight system. In addition to national surveillance, coordination among Member States is supported by a new Committee of European Auditing Oversight Bodies (CEAOB).

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