site.btaIndependent Financial Audit Act Conclusively Revised

Bulgaria's Parliament on Wednesday conclusively adopted revisions to the Independent Financial Audit Act, changing the title of the law to "Independent Financial Audit and Sustainability Assurance Act".

The bill transposed into Bulgarian legislation Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting. The sustainability reports prepared and published by large undertakings and by small and medium-sized enterprises that are public-interest entities will be subject to audit as to limited or reasonable sustainability assurance.

The amendments lay down rules for: the acquisition of a licensed capacity of a registered sustainability auditor; the rights, obligations and responsibilities of registered sustainability auditors; the requirements regarding the performance of sustainability assurance engagements; and the rules on building and functioning of the System for Quality Assurance Review of the professional activity of registered sustainability auditors, including investigations, sanctions and reporting of irregularities.

To acquire a registered sustainability auditor qualification, applicants must pass written tests covering legal requirements and standards relating to the preparation of annual individual and consolidated sustainability reports, sustainability analysis, due diligence processes with regard to sustainability matters, and legal requirements and standards for sustainability assurance reporting adopted by the European Commission. The training will be delivered by the Institute of Certified Public Accountants.

An audit firm that has performed a statutory financial audit of a financial statement of a public-interest entity must withdraw after performing statutory financial audit engagements for a period of ten aggregate years. Any such audit firm may not perform audit engagements in respect of that entity for a period of five successive years reckoned from the date of its withdrawal.