STATUTORY AUDIT IN EUROPE - STATE OF THE ART, CHALLENGES, AND TRENDS

In the last years, in European Union, some new rules were adopted for the statutory audit of the public interest entities (PIEs) by the Directive 2014/56/EU (an amending directive) and by the Regulation No 537/2014. The purpose of these rules is to enhance the independence and the professional skepticism of the statutory auditors. The main requirements for statutory auditors are mandatory audit firm rotation and prohibition of non-audit services for the audit clients. In addition, the amending directive sets out a framework for the statutory audit and tries to improve the public oversight of the audit profession and the cooperation between authorities in the field of the statutory audit in the EU. In this context, the purpose of this study is to discuss the state of the art, the challenges, and the trends of the statutory audit in European Union. Because the primary objective of the reform of the statutory audit is to increase the quality of this important service for the orderly functioning of markets, this study contributes to the literature by identifying new changes that are necessary for the audit profession.