Enacted Summary
The National Commission for Listed Companies and the Stock Exchange (CONSOB) requires the use of Italian Auditing Standards in the audit of listed entities, their significant subsidiaries and holding companies, and other public interest entities (PIEs). These standards are set by the Consiglio Nazionale dei Dottori Commercialisti e Degli Esperti Contabili (CNDCEC) and have recently become mandatory for non-PIEs as well. A 2010 International Federation of Accountants (IFAC) report states that the Italian Auditing Standards are “strictly” based on International Standards on Auditing (ISAs), with minor exceptions related to national requirements and additional procedures. The IFAC report also states that Italy implemented the EU Directive on Statutory Audit (2006/43/EC) in November 2009. The Directive requires all statutory audits of annual and consolidated accounts to be carried out in accordance with the international auditing standard adopted by the EU. Although such standards are currently pending adoption by the EU, it is widely anticipated that ISAs as issued by the International Auditing and Assurance Standards Board of the IFAC will be adopted.
General Overview
In its 2006 Financial Sector Assessment Program of Italy, the International Monetary Fund states that Italy has been harmonizing its national auditing standards with International Standards on Auditing (ISAs) since 2003, after the National Commission for Listed Companies and the Stock Exchange (CONSOB) called for the adoption of the internationals standards on auditing. According to a self-assessment submitted to the International Federation of Accountants (IFAC) by the Consiglio Nazionale dei Dottori Commercialisti e Degli Esperti Contabili (CNDCEC) in 2009, the Italian Auditing Standards are “closely based” (p. 25) on the ISAs. However, a subsequent IFAC report published in February 2010, states that ISAs have been translated into Italian and adopted on a de facto basis, as the Italian Auditing Standards. The national standards, per the same report, are “strictly based on ISAs, and include only minor modifications due to national requirements and limited additional procedures” (p. 16). The IFAC report classified Italy as a jurisdiction whose “national standards are the ISAs” (p. 4). The definition of this classification implies that the modifications made to the ISAs in adapting them for national application, should be in line with the International Auditing and Assurance Standards Board (IAASB) of the IFAC Modifications Policy.
Prior to 2008, national auditing standards were set by the Consiglio Nazionale dei Ragionieri e Periti Commerciali (CNRPC) and the Consiglio Nazionale dei Dottori Commercialisti (CNDC). The CNRPC and CNDC on January 1, 2008, merged to form the CNDCEC, as is indicated in the paper titled "The Italian Accountancy Profession" available on the CNDCEC's website. The updated 2006 CNDCEC report states that under Legislative Decree No. 58 of 1998, listed entities, their significant subsidiaries and holding companies, and other public interest entities (PIEs) are required to apply the Italian Auditing Standards as set by the CONSOB in consultation with the CNDCEC. Non-listed companies on the other hand, per the 2009 CNDCEC report, are not subject to similar requirements. Instead, the report states that the CNDCEC “recommends the principles to its members” (p. 23). An IFAC report subsequently published in February 2010, states that the Italian Auditing Standards are now mandatory in the audits of even non-PIEs, citing it as a “significant change” (p. 17).
A CNDCEC's 2005 self-assessment notes that the Bank of Italy (BoI) is the authority that regulates banks and similar financial institutions. The BoI, however, does not have the power to enact auditing standards; however, it can issue additional financial reporting regulations that banks have to apply. Other companies like non-financial institutions have no regulatory authority to enforce auditing standards. Insurance companies are supervised by the Institute for the Supervision of Private Insurance Undertakings, which have the power to verify compliance with the imposed rules and regulations, request information and conduct inspections of the regulated entities. In addition, it can summon the auditors of the auditing firms that have the duty of auditing the financial statement of insurance companies.
On May 17, 2006, Directive 2006/43/EC of the European Parliament and the Council came into force requiring all statutory audits to be carried out on the basis of international auditing standards as adopted by the European Commission (EC). Although such standards are currently pending adoption by the EU, it is widely anticipated that ISAs as issued by the IAASB of the IFAC will be adopted. The Directive aims at high-level, though not full, harmonization of statutory audit requirements. EU member states were required to adopt and publish the provisions necessary to comply with the Directive by June 29, 2008. The Directive indicates that in an effort to achieve a maximum degree of harmonization, EU member states should be allowed to impose additional national audit procedures or requirements which stem from specific national legal requirements. The 2010 IFAC report states that Italy has implemented the Directive via a legislative decree enacted in November 2009.
The Principles
ENISA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing (effective 2009)
An IFAC report published in February 2010 states that ISAs have been translated into Italian and adopted on a de facto basis as the Italian Auditing Standards. The report further states that these standards are “strictly based on ISAs, and include only minor tailoring due to national requirements and limited additional procedures” (p. 16).
ENISA 210 Agreeing the Terms of Audit Engagements (effective 2009)
See ISA 200.
ENISA 220 Quality Control for an Audit of Financial Statements (effective 2009)
See ISA 200.
ENISA 230 Audit Documentation (effective 2009)
See ISA 200.
ENISA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements (effective 2009)
See ISA 200.
ENISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2009)
See ISA 200.
ENISA 260 Communications of Audit Matters with Those Charged With Governance (effective 2009)
See ISA 200.
ENISA 265 Communicating Deficiencies in Internal Control to those Charged with Governance and Management (effective 2009)
See ISA 200.
ENISA 300 Planning an Audit of Financial Statements (effective 2009)
See ISA 200.
ENISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2009)
See ISA 200.
ENISA 320 Materiality in Planning and Performing an Audit (effective 2009)
See ISA 200.
ENISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2009)
See ISA 200.
ENISA 402 Audit Considerations Relating to an Entity Using a Service Organization (effective 2009)
See ISA 200.
ENISA 450 Evaluation of Misstatements Identified during the Audit (effective 2009)
See ISA 200.
ENISA 500 Audit Evidence (effective 2009)
See ISA 200.
ENISA 501 Audit Evidence—Specific Considerations for Selected Items (effective 2009)
See ISA 200.
ENISA 505 External Confirmations (effective 2009)
See ISA 200.
ENISA 510 Initial Audit Engagements—Opening Balances (effective 2009)
See ISA 200.
ENISA 520 Analytical Procedures (effective 2009)
See ISA 200.
ENISA 530 Audit Sampling (effective 2009)
See ISA 200.
ENISA 540 Audit of Accounting Estimates (effective 2009)
See ISA 200.
ENISA 545 Auditing Fair Value Measurements and Disclosures (effective 2004, superseded by ISA 540 in December 2009)
See ISA 200.
ENISA 550 Related Parties (effective 2009)
See ISA 200.
ENISA 560 Subsequent Events (effective 2009)
See ISA 200.
ENISA 570 Going Concern (effective 2009)
See ISA 200.
ENISA 580 Written Representations (effective 2009)
See ISA 200.
ENISA 600 Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) (effective 2009)
See ISA 200.
ENISA 610 Using the Work of Internal Auditors (effective 2009)
See ISA 200.
ENISA 620 Using the Work of an Auditor’s Expert (effective 2009)
See ISA 200.
ENISA 700 Forming an Opinion and Reporting on Financial Statements (effective 2009)
See ISA 200.
ENISA 705 Modifications to the Opinion in the Independent Auditor’s Report (effective 2009)
See ISA 200.
ENISA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report (effective 2009)
See ISA 200.
ENISA 710 Comparative Information—Corresponding Figures and Comparative Financial Statements (effective 2009)
See ISA 200.
ENISA 720 The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements (effective 2009)
See ISA 200.
ENISA 800 Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (effective 2009)
See ISA 200.
ENISA 805 Special Considerations—Audits of Single Financial Statements And Specific Elements, Accounts Or Items Of A Financial Statement (effective 2009)
See ISA 200.
ENISA 810 Special Considerations—Engagements to Report On Summary Financial Statements (effective 2009)
See ISA 200.
