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May 13

Reviewers outside the transposition of Community legislation

The Statutory Auditors were not involved in the draft of legislative proposals for approval by the Council of Ministers, putting the future of Auditing in Portugal in question.

 

The transLogo_OROCthe position of the European directive on auditing for the Portuguese legal system should occur by mid-2016. Along with this transposition, the European regulation on the auditing of Public Interest Entities should be adopted.

The Order of Statutory Auditors believes that this transposition process should be used to develop a thorough review of the legislation currently in force regarding corporate governance and corporate auditing, in order to ensure the coherence between different dispersed legislation and the strengthen inspection and governance mechanisms in accordance with the practice adopted in the most developed European countries.

The Order recognizes that it is necessary to guarantee the quality of the audit, however it is essential that this be ensured with the involvement of the various parties related to the financial information of the companies and never to resolve small interests, to the detriment of the general interest, in spite of the multiple stakeholders in the accountability process and their recipients.

Thus, the legislative process must result from a deep technical and practical reflection and a wide-ranging debate, involving the various interested entities: professionals, companies or other entities, professional organizations, specialists in the field, supervisors and the recipients of financial information.

However, what has been reported and is known to the Directive Council of the Order is that a draft legislative proposal has been prepared to be submitted for approval by the Council of Ministers.

Contrary to the history of equivalent legislative processes, the most recent being the work leading to the transposition of the Accounting Directive, the Order is surprised by the lack of involvement of the main stakeholders and affected by the quality of the audit, understanding that this is the main purpose of the regulation European.

The Order understands that this is not the way to achieve the quality required in the audit and fears that the legislative process followed will lead to serious damage to the public interest.

As is happening in the other Member States, the Government should promote a broad public debate on the topic, involving mainly the entities representing all interested parties, before the approval of any draft law.

 

José Azevedo Rodrigues

President of the Order of Statutory Auditors

 

Lisbon, 13 May 2015

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