France, Germany and Portugal are the only EU countries yet to adopt international auditing standards (ISA) in the EU, according to a report by the Federation of European Accountants (FEE).
Issued by the International Auditing and Assurance Standards Board (IAASB), the standards have been voluntarily adopted by 25 of the EU member states, an increase on adoption figures from 2013, according to the FEE.
Under the EU Audit Directive, which entered into force 16 June 2014, the European Commission (EC) was granted the power to impose the use of ISAs for all statutory audits across the EU.
However, as the Commission is yet to formally adopt ISAs and nor has it set a timetable for adoption, the Directive allows EU member states to maintain national auditing standards in the meanwhile.
The fact that the remaining three countries are waiting for the standards to be implemented by the EC highlights the need for adoption across the EU, according to the FEE.
The federation warned that without a Union-wide implementation, ISAs might be adopted at different times and some of the standards may be neglected in their entirety within some jurisdictions.
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By GlobalDataUltimately, this would result in "an increased lack of harmonisation throughout the EU".
Further, according to the FEE EU-wide coordination and collaboration would be more likely to guarantee the quality of each jurisdiction’s ISA translation.
Speaking to The Accountant, a spokesperson for the FEE explained: "As far as FEE understands, the European Commission has not set a timeframe to adopt the ISAs.
"Even if the EC is empowered by law to adopt the ISAs at EU level (since the 2006 Directive actually), it seems unlikely that they will make this political decision in a foreseeable future."
As for those countries who are awaiting EC adoption, the spokesperson added some countries will also be affected by the legal implications of changing their standard-setting processes.
"For France and Germany, there is a process of transposition into national standards that has been in place for years," the spokesperson explained.
Looking to the future, the spokesperson added that 2015 had already witnessed successes in the form of ISA adoption by Italy and Poland, adding to ongoing progress in Portugal.
"Portugal is in the process of adopting," the spokesperson added, "We hope they will be ready soon."
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