Cap. 281 Art. 18Publication of transparency report in the audit of public-interest entities..

(1) An auditor or an audit firm that carries out statutory audits of public-interest entities shall make public an annual transparency report at the latest four months after the end of each financial year. That transparency report shall be published on the website of the auditor or the audit firm and shall remain available on that website for at least five years from the day of its publication on the website. If the auditor is employed by an audit firm, the obligations under this article shall be incumbent on the audit firm.

An auditor or an audit firm shall be allowed to update its published annual transparency report. In such a case, the auditor or the audit firm shall indicate that it is an updated version of the report and the original version of the report shall continue to remain available on the website. Auditors and audit firms shall communicate to the competent authorities that the transparency report has been published on the website of the auditor or the audit firm or, as appropriate, that it has been updated.

(2) The annual transparency report shall include at least the following:

(i) a description of the network and the legal and structural arrangements in the network;

(ii) the name of each auditor operating as a sole practitioner or audit firm that is a member of the network;

(iii) the countries in which each auditor operating as a sole practitioner or audit firm that is a member of the network is qualified as a statutory auditor or has his, her or its registered office, central administration or principal place of business;

(iv) the total turnover achieved by the auditors operating as sole practitioners and audit firms that are members of the network, resulting from the statutory audit of annual and consolidated financial statements;

(c) a description of the governance structure of the audit firm;

(d) a description of the internal quality control system of the auditor or of the audit firm and a statement by the administrative or management body on the effectiveness of its functioning;

(e) an indication of when the last quality assurance review referred to in Article 26 of the Audit Regulation was carried out;

(f) a list of public-interest entities for which the auditor or the audit firm carried out statutory audits during the preceding financial year;

(g) a statement covering the auditor’s or the audit firm’s independence practices which also confirms that an internal review of independence compliance has been conducted;

(h) a statement on the policy followed by the auditor or the audit firm concerning the continuing education of auditors as referred in Directive 1 Accountancy Profession (Continued Professional Education);

(i) information concerning the basis for the principals’ remuneration in audit firms;

(j) a description of the auditor’s or the audit firm’s policy concerning the rotation of key audit partners and staff in accordance with Article 17(7) of the Audit Regulation;

(k) where not disclosed in its financial statements within the meaning of article 167(2) of the Companies Act, information about the total turnover of the auditor or the audit firm, divided into the following categories: public-interest entity;

(ii) revenues from the statutory audit of annual and consolidated financial statements of other entities;

(iii) revenues from permitted non-audit services to entities that are audited by the statutory auditor or the audit firm; and

(iv) revenues from non-audit services to other entities. The auditor or the audit firm may, in exceptional circumstances, decide not to disclose the information required in paragraph (f) to the extent necessary to mitigate an imminent and significant threat to the personal security of any person. The auditor or the audit firm shall be able to demonstrate to the Board the existence of such threat.

(3) The transparency report shall be signed by the auditor or the audit firm.