ICAC advances in the regulatory development of the Audit of Accounts Act

The regulation aims to increase the guarantee and certainty for interpreting and implementing the provisions set forth in the Act.

The new regulation develops, among other things, aspects relating to the duty of independence, measures to safeguard it and the internal organisation of auditors.

The Institute of Accounting and Auditing of Accounts (ICAC) has today opened the public hearing of the draft Royal Decree for the approval of the Regulation that develops the Audit of Accounts Act (LAC).

The main objective of this regulatory development is to increase the guarantee and security for interpreting and executing the provisions established in the Law. This increase in legal certainty will result in better execution and performance of the audit work, in better compliance with the rights and obligations established in the standard and, consequently, in greater reliability of the information being audited.

The new regulation seeks to protect the public interest function of auditing accounts by strengthening their quality. To this end, it develops, among others, the aspects related to the duty of independence and the measures that must be adopted by the auditors to safeguard it, and the rules that limit the concentration of fees in respect of an audited entity are specified.

In addition, the principles that must be followed by the internal procedures and systems of auditors and audit firms are developed so that they have a solid internal organization. This ensures the effective application of the principle of proactive responsibility that is incorporated in the Law that is being developed.

Finally, the new regulation also develops the specific provisions for smaller auditors in compliance with the allotments contained in the Law.

For its elaboration, numerous meetings have been held with representatives of the representative corporations of the auditors, and their articulation has been discussed in detail.

The amendments will enter into force, in general, from 1 July.

Interested parties can consult the text on the Institute’s website: www.icac.meh.es.