European Parliament elections take place
On 26 May, the European Parliament elections took place with 751 MEPs elected to represent European citizens.
With 179 MEPs (37 less than previous term), Christian Democrats remain the largest group but they will have to seek more than one ally in the future to get their policies through.
Socialists came in second with 153 MEPs (-32), followed by the big winner liberal ALDE group with 110 seats (+36). Greens can also be considered winners, as they are now the fourth largest group with 74 MEPs (+22). The far-Left GUE-NGL registered significant losses, and now stands at 38 MEPs (-14).
On the far-Right side, several new MEPs from Italy and France contributed to a predicted surge in strength. Whether or not the various far-Right factions can rally behind a common political grouping will determine their eventual strength.
For audit, it is particularly relevant that the Greens emerged strong from the elections, since they consider the review of the Audit Reform to be one of their priorities for the upcoming term. Read more
European Commission formally adopts ESEF, becomes a statutory requirement
European Commission has formally adopted the technical regulatory standards developed by ESMA on a European Single Electronic Format (ESEF), under the Transparency Directive. No objections were raised from either the European Parliament or the Council.
The Commission also published a legally non-binding Q&A document to help guide relevant stakeholders through the new requirements. The Q&A document clarifies that ESEF will be a statutory requirement as defined in the Audit Directive, and thus means it will have to be audited.
The Q&A also confirms that the Commission is coordinating with the Committee of European Auditing Oversight Bodies (CEAOB) in order to possibly provide further guidance on ESEF auditing. Moreover, the Commission will assess whether the audit of ESEF would warrant changes to the Transparency Directive.
For further information on ESEF, see our recent publication.
An Empirical Analysis of Key Audit Matters in the Financial Industry
The European Banking Institute issued a publication analysing Key Audit Matters (KAMs) based on 2017 audit reports of supervised European banks. This year marks the first year in which KAMs for all European public interest entities (PIEs) can be observed. Read more
Accountancy Europe also carried out work in this area – you can check our analysis and good practice examples of KAMs reported in the banking sector here. Currently, we are working on a 2018 update which will be issued in September 2019.