IFIAR 2015 Member Profile - APOA
Jurisdiction:
Hungary
1. Organization
Insert the name of the Organization, both in the local language and in
English:
KÖNYVVIZSGÁLÓI KÖZFELÜGYELETI HATÓSÁG
AUDITORS’ PUBLIC OVERSIGHT AUTHORITY
Include relevant contact information, including postal address, telephone
numbers, a link to the website and other relevant information:
Website: http://www.kormany.hu
Address: Könyvvizsgálói Közfelügyeleti Hatóság
H-1051 Budapest, József nádor tér 2-4.
Contact details:
Tel: +36 1 795 1570
Fax: +36 1 795 0294
E-mail: kozfelugyelet@ngm.gov.hu
Contact person:
Csilla Molnar
Deputy Head of Department
Department of Accounting and Oversight
Ministry for National Economy
Tel: +36 1 795-3543
E-mail: csilla.molnar@ngm.gov.hu
Include the basis for establishment and the mission/responsibilities and
authority with respect to audit regulation:
Certain amendments of the Act LXXV of 2007 on the Chamber of
Hungarian Auditors, the Activities of Auditors, and on the Public
Oversight of Auditors (hereinafter: Act on Audit) a public oversight
authority was set up on 1st July 2013 as the successor of the Auditors’
Public Oversight Committee. The authority have, among others, two
main responsibilities: exercises legal control over the Chamber of
Hungarian Auditors (hereinafter: the Chamber) and carries out quality
control reviews of auditors of PIE’s.
See the legislative background of the Authority below:
The Act on Audit serves as a transposition of the Directive 2006/43/EC
of the European Parliament and of the Council. On 1 July 2013 the Act
established the Auditors' Public Oversight Authority.
IFIAR 2015 Member Profile - APOA
The Authority is responsible for public oversight and thus monitors and
evaluates the various components of the system of public oversight of
statutory auditors and audit firms, such as:
a) the procedures for the granting of authorizations to carry out
statutory audits, the records and registers of the Chamber;
b) the drafting and approval of Hungarian national accounting
standards, the Chamber’s code of ethics, and the national
standards relating to quality control;
c) the functioning of the continuing professional training program
and the quality assurance system;
d) the disciplinary proceedings.
The Authority cooperates with the competent authorities of third
countries.
The Authority may present recommendations to the minister in charge
of accounting regulations (hereinafter: Minister) regarding new
legislation or to initiate specific measures.
The Authority, if noticing any situation where the interests of entities
audited by statutory auditors are jeopardized, shall, upon the analysis,
assessment and evaluation of the facts available and consistent with the
degree of endangerment:
a) present recommendations to the Chamber or the Minister
concerning potential solutions to eliminate situations where the
interests of entities audited by statutory auditors are
jeopardized;
b) initiate proceedings at the Chamber bodies of competence;
c) initiate judicial ministerial oversight proceedings.
Have there been any changes to your governing legislation since
completing last year’s Member Profile?
 Yes
☐ No
If yes, please describe the changes:
Solely minor, practically technical amendments entered into force in the
governing legislation since the completion of last year’s Member Profile.
2. Governing
Body
Composition
and Members
Describe the current composition of the organization’s governing body:
Since 1 July 2013 the minister in charge of accounting regulation (the
Minister for National Economy) is responsible for carrying out the
functions related to the public oversight of auditors. The minister
delegated this function to the Department of Accounting and Oversight.
IFIAR 2015 Member Profile - APOA
What are the eligibility criteria / requirements or composition
requirements for the members of the governing body?
The governing body is the minister, laid down by national legislation. No
other requirements included in governing legislation per now.
Is each member of the governing body independent of the audit
profession? The audit profession includes, for example: audit firms,
professional bodies and bodies or entities associated with the audit
profession. 1
 Yes
☐ No
Are the majority of the members of the governing body nonpractitioners?
 Yes
☐ No
If not all members of the governing body are independent, what
safeguards are in place to provide for the organization’s overall
independence from the audit profession?
Is there a restriction or recusal process that is applicable to members of
the governing body of your organization who are current or former
auditors/practitioners?
 Yes
☐ No
Does this include a “cooling-off” period for former auditors?
 Yes
☐ No
If yes to either of the above, please describe:
Act on Audit 173/B. (6) The person appointed to conduct quality
assurance reviews in the name and on behalf of the public oversight
authority (hereinafter referred to as reviewer) shall meet the following
conditions:
a) the reviewer and the inspected audit firm are not engaged in
any business relationship during the period of the quality
assurance review, nor had they been engaged in any business
1
For purposes of this questionnaire, the audit profession does not include an individual who is a
CPA, Chartered Accountant, or holder of another equivalent qualification, but who is not
employed by a registered audit firm, nor employed by or acting on behalf of a professional
accountancy body.
IFIAR 2015 Member Profile - APOA
b)
c)
d)
e)
f)
g)
relationship during any period of time after the last quality
assurance review of the audit firm in question;
the reviewer and the inspected registered statutory auditor and
any close relative of him/her are not engaged in any business
relationship during the period of the quality assurance review,
nor had they been engaged in any business relationship during
any period of time after the last quality assurance review of the
registered statutory auditor in question;
the reviewer and the Chamber member inspected are not
closely related;
the conditions set out in Paragraphs a)-c) regarding the reviewer
are also satisfied by the reviewers close relative(s);
at least two years have elapsed since the reviewer had been last
associated with, or had been employed under an employment
or a similar relationship by, the inspected registered statutory
auditor or audit firm engaged in carrying out statutory audits;
the reviewer is not licensed by the Chamber to engage in
carrying out statutory audits required by law;
the reviewer may not be associated with, and may not be
employed by, a registered statutory auditor or an audit firm
under an employment or a similar relationship.
Other than the governing body, are members of the profession involved
in your organization (e.g., in a management or inspection function)?
☐ Yes
 No
If yes, please describe their role:
3. Funding
Arrangements
Describe the main funding arrangements, including the setting and
approval of the budget and the fees, if any:
The activities of the Authority are funded from the following two
resources:
1. State budget: the annual fiscal budget appropriate funds to ensure
the efficient functioning of the system of public oversight of statutory
auditors.
2. Public oversight fee: The Chamber pays public oversight fee to the
Authority for carrying out the public oversight functions. (The public
oversight fee shall be five per cent of the Chambers' proceeds from
membership fees and contribution payments received for the year.)
IFIAR 2015 Member Profile - APOA
The Authority decides on the use of the amount according to its working
plan.
Is the funding free from undue influence by the profession?
 Yes
4. Inspection
System
☐ No
Do you have the responsibility for recurring inspections of audit firms
undertaking audits of public interest entities?
 Yes
☐ No
Is this responsibility undertaken directly or through oversight of
inspection conducted by another party?
 Directly
☐ Through Oversight
If through oversight of another party, please describe the other party, its
role, and the arrangements for oversight:
Please describe the requirements and practices regarding the frequency
of inspections:
Quality control shall be conducted at least every six years and auditors
of PIEs shall be controlled every 3 years.
5. Audit and
Financial
Market
Provide the number of audit firms subject to inspections. Include an
indication of the number of public interest audits and other audits that
fall under the member organization’s oversight / mandate.
Since 1 January 2013 companies qualified as PIEs, which are:
- entities whose transferable securities are admitted to trading on a
regulated market of any Member State of the European Economic Area;
- credit institutions that operates in the form of a public limited
company, and any credit institution whose balance sheet total for the
preceding financial year reached five hundred billion forints.
- insurance companies that operates in the form of a public limited
company, and any insurance company whose annual gross premium
revenue for the preceding financial year reached 1 billion and 500
million forints.
Currently there are 98 PIEs audited by 22 audit firms. There are all
together 3100 registered audit firms.
IFIAR 2015 Member Profile - APOA
What are the sizes and market shares of each of the largest audit firms?
Out of the 98 100 PIE, 63 are audited by the BIG4 firms. (Deloitte: 15, EY:
15, KPMG: 21, PwC: 12).
6. Main Other
Tasks
Performed by
Member
Describe whether the Member also performs other tasks, such as
registration, education, standard setting and enforcement in the area of
auditing, or other supervisory tasks, such as supervision of financial
reporting or securities regulation:
The Authority is responsible for public oversight and thus monitors and
evaluates the various components of the system of public oversight of
statutory auditors and audit firms, such as:
e) the procedures for the granting of authorizations to carry out
statutory audits, the records and registers of the Chamber;
f) the drafting and approval of Hungarian national accounting
standards, the Chamber’s code of ethics, and the national
standards relating to quality control;
g) the functioning of the continuing professional training program
and the quality assurance system;
h) the disciplinary proceedings.
The Authority cooperates with the competent authorities of third
countries.
The Authority may present recommendations to the minister in charge
of accounting regulations (hereinafter: Minister) regarding new
legislation or to initiate specific measures.
The Authority, if noticing any situation where the interests of entities
audited by statutory auditors are jeopardized, shall, upon the analysis,
assessment and evaluation of the facts available and consistent with the
degree of endangerment:
d) present recommendations to the Chamber or the Minister
concerning potential solutions to eliminate situations where the
interests of entities audited by statutory auditors are
jeopardized;
e) initiate proceedings at the Chamber bodies of competence;
f) initiate judicial ministerial oversight proceedings.
7. Major Events
and Activities
Describe any recent major events and activities: