The European Commission has decided to refer Slovenia to the Court of Justice of the EU for failing to notify measures for fully implementing EU rules on audit in its national legal system. A timely implementation of the Audit Directive (Directive 2014/56/EU) is an important step to reinforce and strengthen EUlegislationon statutory audit, as it addresses a number of shortcomings observed in the audit market during the last crisis. Member States' laws, regulations and administrative provisions necessary to comply with the Directive had to enter into force by 17 June 2016 and the Commission had to be informed immediately.
Slovenia's failure to implement the Directive currently prevents stakeholders, such as investors and shareholders, from benefitting from the new rules which considerably improve audit quality. It also has a detrimental effect on the orderly functioning of national and EU markets. In addition, there are concerns on the reliability and trustworthiness of Slovenia's national framework as the enhanced requirements for independence and objectivity contained in the Directive have not been implemented.
The Audit Directive - which amends the previous Audit Directive (Directive 2006/43/EC) - lays down the conditions for the approval and registration of persons that carry out statutory audits. It also sets out the rules on independence, objectivity and professional ethics applying to those persons and the framework for their public oversight. A statutory audit is a legally-required review of financial records. The role of a statutory audit is to certify the financial statements of companies or public entities.
In July 2016, the European Commission formally requested Slovenia to implement the Audit Directive (Directive 2014/56/EU). Subsequently,Slovenia notified partial transposition. The measures notified only implemented one article and a few provisions regarding the definitions contained in the Directive. However, Slovenia did not notify any other remaining provisions related to the Directive at stake. In February 2017, the Commission sent a reasoned opinion to the Slovenian authorities. To date, it has not complied with the Commission's reasoned opinion.
For More Information:
-On the key decisions in the October 2017 infringements package, see full MEMO/17/3494.
-On the EU infringements procedure.