The Czech Republic finalised the transposition of the EAR by passing amendments to the Act on Auditors on August 25, 2016, effective October 1, 2016.
The main elements of the Czech law are the following:
- The PIE definition was expanded to include pension companies that regulate retirement savings or additional pension savings, as well as health insurance companies.
- Mandatory firm rotation is required after 10 years. The audit mandate can be extended for another 10 years if an open and competitive tender has been carried out.
- In the case of a sole audit, the first 10-year period can be extended by another 10 years (20 years in total), if a competitive and open tender is performed at the end of the first 10 years.
- In the case of a joint audit, the maximum duration of the engagement is 24 years (no tendering required).
- No additional items have been added to the EU list of prohibited non-audit services.
- The Czech Republic exercised the option to allow the provision of certain tax and valuation services. However, the Czech law does not allow provision of all the tax services listed in Article 5 of the Regulation (for more information, please read our information sheet).
- The fee cap for non-audit services is maintained at 70%, as established in the EU legislation.
For a more detailed overview of the Czech implementation measures, please consult our information sheet.