APAS issues new statements on auditor regulation

Germany's Audit Oversight Body (APAS) has issued a series of new statements that clarify auditing regulations for public interest entities. These statements address key aspects of auditor conduct and regulatory compliance within the German financial market.

The new guidance covers several areas, including the permissible continuation of tax advisory services, the classification of mutual insurance associations as public interest entities, auditor "cooling-off" periods, and the determination of when an entity qualifies as a public interest entity.

Among the statements is an interpretation (Verlautbarung Nr. 13) on transitional rules for tax advisory services, allowing them to continue until the audit report is issued for financial years commencing before January 1, 2022, provided the services clearly relate to those prior years.

Furthermore, a clarification (Verlautbarung Nr. 14) addresses when mutual insurance associations (VVaG) are not considered public interest entities (PIE) under German law, referencing Solvency II Directive provisions.

APAS also provided clarification on auditor rotation rules (Verlautbarung Nr. 15), stating that deliberate interruptions to circumvent the ten-year maximum tenure are impermissible and confirming the four-year "cooling-off" period requirement.

Finally, guidance (Verlautbarung Nr. 16) confirms that an entity's status as a public interest entity is assessed on its balance sheet date, and the calculation of the audit tenure begins in the year the entity became a PIE.