CZECH REPUBLIC Member of Presidium
Structure of the Czech Audit Public Oversight Council Council Structure 6 Presidium members appointed by the Minister of Finance 2 auditors (exception for one auditor in the first year of the Council s existence) 1 member delegated by the Czech National Bank 1 member delegated from the academic sphere - universities 1 member delegated by the business sector 1 member representing regulated professions Legislative Basis Act No. 93/2009 Coll. on Auditors, implementing the 2006/43/EC Directive on statutory audits and consolidated accounts Onset of the Council s Activity 15.5.2009
Role and mission of the Public Oversight Council the Council performs a public oversight of audit activities and activities of the Chamber of Auditors inspects compliance with the Code of Ethics, auditing standards and internal regulations of the Chamber of Auditors oversees the organisation, management and operation of the quality control system for audit activities oversees the system of continuous education oversees the application of disciplinary and punitive measures by the Chamber in proceedings against auditors, or auditors from third countries The Council s mission is the protec=on of public interest
Relationship with the Auditing Profession represented by the Chamber of Auditors the Chamber is required to cooperate with the Council on all matters related to the public oversight representatives of the Chamber partake in activities of the Council s working committees representatives of the Council have the right to participate in proceedings of the Chamber s bodies good mutual communication also in the level of an informal discussion and exchange of information and opinions
Rela%onships with Financial Market Authori%es cooperates with the Czech National Bank as regards supervision of auditors carrying out audit activities, Public Interest Entities subject to supervision of the Czech National Bank - legal entities incorporated under the Czech law trading on a regulated market in any Member State of EU, banks, insurance companies, pension funds etc. cooperates with the Ministry of Finance on the preparation of legislation related to the statutory audit
Scope of the Public Oversight Council auditor s responsibilities include cooperation with the Audit Public Oversight Council the Audit Public Oversight Council controls all audit activities provided in the Czech Republic in accordance with the Czech Act on Auditors including auditing standards, the Code of Ethics and internal regulations issued by the Chamber of Auditors the Council submits to the Chamber proposals on carrying out quality controls the Council oversees implementation of quality controls through an authorised person annually the Chamber submits to the Council a summary report of all quality controls carried out, wherein substantial findings and serious repeated deficiencies found during the inspections are listed on request, the Chamber shall provide the Council with all information and specific case documentation pertaining to public oversight
Financing activity of the Council is financed by income from penalties for breaches of professional regulations in the event of insufficient funding from penalties, the Council s activities are financed from the state budget, which in the current early stages of the Council s existence is its main source of income
Staffing Administrative and operational activities of the Council are performed by the secretariat Executive Secretary Assistant Professional activities of the Council are currently performed by members of the Presidium and working committees: Committee for Cooperation and Coordination in Auditing Committee for the Compliance with Quality Control Systems and Disciplinary Procedures Committee for Coordination of Education and Professional Exams Audit Committee
Quality Assurance in accordance with the new Act on Auditors, this means primarily assurance of the independence principle in case of statutory audit of Public Interest entities, audit committees are also created. The auditor of such an entity must in addition once a year draw up a declaration of independence, inform the audit committee in writing of any supplemental services provided to the audited organisation, at the same time discussing any potential threats to independence and including safeguard mechanisms for the elimination of such threats. quality control of auditors is mandatory to be carried out at least every 6 years quality control of auditors of public interest entities is carried out at least every 3 years
Inves%ga%on and Discipline The quality control system is organised and managed by the Chamber of Auditors in accordance with the Supervisory Regulations The quality control system is independent of the entity controlled and is subject to public oversight Disciplinary actions arise from the Act on Auditors admonition public admonition penalty of up to 1 000 000 CZK, in case of a public interest subject 2 000 000 CZK temporary ban to perform audit activities permanent ban to perform audit activities In case of misconduct in the name of an audit company, a penalty of up to 5 000 000 CZK can be imposed.
Transparency Among the Council s duties is an obligation to inform the public about its activities. an annual report on public oversight of audit web pages with continuous information of the Council s activities publication of articles and information about public oversight in the press